<PAGE>
File Number 33-71058
811-8116
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Post-Effective Amendment No. 10
---
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Post-Effective Amendment No. 11
---
ALLMERICA SELECT SEPARATE ACCOUNT OF
FIRST ALLMERICA FINANCIAL LIFE INSURANCE COMPANY
(Exact Name of Trust)
First Allmerica Financial Life Insurance Company
440 Lincoln Street
Worcester Massachusetts 01653
(508) 855-1000
(Registrant's telephone number including area code)
Abigail M. Armstrong, Secretary and Counsel
First Allmerica Financial Life Insurance Company
440 Lincoln Street
Worcester MA 01653
(Name and complete address of agent for service)
It is proposed that this filing will become effective:
X immediately upon filing pursuant to paragraph (b)
----
on February 1, 1998 pursuant to paragraph (b)
----
60 days after filing pursuant to paragraph (a)(1)
----
on (date) pursuant to paragraph (a)(1)
----
on (date) pursuant to paragraph (a)(2) of Rule 485
----
this post-effective amendment designates a new effective date
---- for a previously filed post-effective amendment
VARIABLE ANNUITY CONTRACTS
Pursuant to Reg. Section 270.24f-2 of the Investment Company Act of 1940,
Registrant hereby declares that an indefinite amount of its securities is
being registered under the Securities Act of 1933. The Rule 24f-2 Notice for
the issuer's fiscal year ended December 31, 1997 will be filed on or before
February 27, 1998.
<PAGE>
CROSS REFERENCE SHEET SHOWING LOCATION IN PROSPECTUS OF
ITEMS CALLED FOR BY FORM N-4
FORM N-4 ITEM NO. CAPTION IN PROSPECTUS
- ----------------- ---------------------
1 . . . . . . . . Cover Page
2 . . . . . . . . Special Terms
3 . . . . . . . . Summary; Annual and Transaction Expenses
4 . . . . . . . . Condensed Financial Information; Performance Information
5 . . . . . . . . Description of First Allmerica, the Variable Account, the
Trust, Fidelity VIP and T. Rowe Price.
6 . . . . . . . . Charges and Deductions
7 . . . . . . . . Description of the Contract
8 . . . . . . . . Electing the Form of Annuity and the Annuity Date;
Description of Variable Annuity Option; Annuity Benefit
Payments
9 . . . . . . . . Death Benefit
10. . . . . . . . Payments; Computation of Values; Distribution
11. . . . . . . . Surrender; Withdrawals; Charge For Surrender and
Withdrawal; Withdrawal Without Surrender Charge; Texas
Optional Retirement Program
12. . . . . . . . Federal Tax Considerations
13. . . . . . . . Legal Matters
14. . . . . . . . Statement of Additional Information-Table of Contents
FORM N-4 ITEM NO. CAPTION IN STATEMENT OF ADDITIONAL INFORMATION
- ----------------- ----------------------------------------------
15. . . . . . . . Cover Page
16. . . . . . . . Table of Contents
17. . . . . . . . General Information and History
18 . . . . . . . Services
19. . . . . . . . Underwriters
20. . . . . . . . Underwriters
21 . . . . . . . Performance Information
<PAGE>
FORM N-4 ITEM NO. CAPTION IN STATEMENT OF ADDITIONAL INFORMATION (CONT'D)
- ----------------- -------------------------------------------------------
22. . . . . . . . Annuity Payments
23. . . . . . . . Financial Statements
<PAGE>
This Post-effective Amendment No. 10 under the Securities Act of 1933 is
being filed for the purposes of adding a supplement to the prospectus and
Statement of Additional Information of Allmerica Select Separate Account of
First Allmerica Financial Life Insurance Company dated May 1, 1997 and to
generally update corporate information for the Company and the Registrant in
Part C. All other pertinent information regarding this Registration
Statement, including the prospectus and Statement of Additional Information,
was previously filed in Registrant's Post-effective Amendment No. 7 on April
30, 1997 and is incorporated by reference herein.
<PAGE>
ALLMERICA SELECT SEPARATE ACCOUNT
FIRST ALLMERICA FINANCIAL LIFE INSURANCE COMPANY
SUPPLEMENT TO PROSPECTUS DATED MAY 1, 1997
THIS SUPPLEMENT SUPPLANTS THE SUPPLEMENT DATED FEBRUARY 1, 1998
***
Effective February 10, 1998, three additional Sub-Accounts will be available
under the Contract. The Sub-Accounts will invest exclusively in shares of the
Select Emerging Markets Fund, the Select Value Opportunity Fund and the Select
Strategic Growth Fund of Allmerica Investment Trust. As such, the following
information supplements the corresponding sections of the Prospectus. Please
consult the Prospectus for the full text of each supplemented section.
Under "4. INVESTMENT OPTIONS" on page P-2 of the Profile, the listing of funds
is revised as follows:
FUND INVESTMENT ADVISER
---- ------------------
International Funds Select Emerging Markets Schroder Capital Management
Fund International Inc.
Select International Bank of Ireland Asset
Equity Fund Management (U.S.) Limited
T. Rowe Price Rowe Price-Fleming
International Stock International, Inc.
Portfolio
Aggressive Growth Select Aggressive Growth Nicholas-Applegate Capital
Funds Fund Management, L.P.
Select Capital Janus Capital Corporation
Appreciation Fund
Select Value Opportunity Cramer Rosenthal McGlynn, LLC
Fund
Growth Funds Select Growth Fund Putnam Investment Management,
Inc.
Select Strategic Growth Cambiar Investors, Inc.
Fund
Fidelity VIP Growth Fidelity Management and
Portfolio Research Company
Growth and Income Select Growth and Income John A. Levin & Co., Inc.
Funds Fund
Fidelity VIP Fidelity Management and
Equity-Income Portfolio Research Company
High Income Fund Fidelity VIP High Income Fidelity Management and
Portfolio Research Company
Income Fund Select Income Fund Standish, Ayer & Wood, Inc.
Money Market Fund Money Market Fund Allmerica Asset Management,
Inc.
1
<PAGE>
Under "5. EXPENSES" in the Profile, the table on page P-3 is deleted and
replaced with the following table as of 12/31/97 (unaudited):
<TABLE>
<CAPTION>
EXAMPLES:
TOTAL ANNUAL
EXPENSES AT
END OF
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL ANNUAL TOTAL ANNUAL TOTAL ANNUAL (1) (2)
FUND INSURANCE CHARGES FUND CHARGES CHARGES 1 YEAR 10 YEARS
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Select Emerging Markets Fund 1.44% 2.00% 3.44% $94 $369
Select International Equity Fund 1.44% 1.12% 2.56% $86 $286
T. Rowe Price International Stock Portfolio 1.44% 1.05% 2.49% $85 $279
Select Aggressive Growth Fund 1.44% 0.98% 2.42% $84 $272
Select Capital Appreciation Fund 1.44% 1.10% 2.54% $85 $284
Select Value Opportunity Fund 1.44% 1.04% 2.48% $85 $278
Select Growth Fund 1.44% 0.93% 2.37% $84 $267
Select Strategic Growth Fund 1.44% 0.98% 2.42% $84 $272
Fidelity VIP Growth Portfolio 1.44% 0.69% 2.13% $81 $243
Select Growth and Income Fund 1.44% 0.77% 2.21% $82 $251
Fidelity VIP Equity-Income Portfolio 1.44% 0.58% 2.02% $80 $231
Fidelity VIP High Income Portfolio 1.44% 0.71% 2.15% $82 $245
Select Income Fund 1.44% 0.71% 2.15% $82 $245
Money Market Fund 1.44% 0.35% 1.79% $78 $207
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
For newly formed funds, fund expenses have been estimated. For more detailed
information, see the Fund Expense Table below.
"8. PERFORMANCE" on pages P-3 and P-4 of the Profile is deleted in its entirety
and replaced by the following:
8. PERFORMANCE
The value of your contract will vary up or down depending on the investment
performance of the funds you choose. The following chart illustrates past
returns for the funds since the inception of each Sub-Account. The performance
figures reflect the contract fee, the insurance charges, the investment charges
and all other expenses of the fund. They do not reflect the surrender charges
which, if applied, would reduce such performance. Past performance is not a
guarantee of future results.
<TABLE>
<CAPTION>
CALENDAR YEAR
--------------------------------------------------
1997
FUND (UNAUDITED) 1996 1995
- ---- ----------- ---- ----
<S> <C> <C> <C>
Select Emerging Markets Fund N/A N/A N/A
Select International Equity Fund 3.16% 20.20% 17.94%
T. Rowe Price International Stock Portfolio 1.63% 12.99% 9.57%
Select Aggressive Growth Fund 17.03% 16.85% 30.44%
Select Capital Appreciation Fund 12.66% 7.24% N/A
Select Value Opportunity Fund N/A N/A N/A
Select Growth Fund 32.18% 20.27% 22.83%
Select Strategic Growth Fund N/A N/A N/A
Fidelity VIP Growth Portfolio 21.74% 13.06% 33.41%
Select Growth and Income Fund 20.79% 19.53% 28.50%
Fidelity VIP Equity-Income Portfolio 26.30% 12.64% 33.15%
Fidelity VIP High Income Portfolio 16.01% 12.40% 18.98%
Select Income Fund 7.62% 1.82% 15.31%
Money Market Fund 3.97% 3.83% 4.33%
</TABLE>
2
<PAGE>
The following are added to the list of funds under the second paragraph of page
1 of the Prospectus:
FUND INVESTMENT ADVISER
---- ------------------
SELECT EMERGING MARKETS FUND SCHRODER CAPITAL MANAGEMENT INTERNATIONAL INC.
SELECT VALUE OPPORTUNITY FUND CRAMER ROSENTHAL MCGLYNN, LLC
SELECT STRATEGIC GROWTH FUND CAMBIAR INVESTORS, INC..
The definition of "UNDERLYING FUNDS (OR FUNDS)" on page 4 of the Prospectus is
revised to add "Select Emerging Markets Fund," "Select Value Opportunity Fund"
and "Select Strategic Growth Fund" as the first, sixth and eighth Funds
respectively.
The number "eleven" is changed to "fourteen" in the first and second sentence
under "WHAT ARE MY INVESTMENT CHOICES?" on page 7 of the Prospectus and the
following are added as the first, sixth and eighth Funds in the second sentence:
- Select Emerging Markets Fund
Managed by Schroder Capital Management International Inc.
- Select Value Opportunity Fund
Managed by Cramer Rosenthal McGlynn, LLC
- Select Strategic Growth Fund
Managed by Cambiar Investors, Inc.
The second paragraph under "WHO ARE THE INVESTMENT ADVISERS OF THE FUNDS AND HOW
ARE THEY SELECTED?" on page 8 of the Prospectus is amended to read in its
entirety as follows:
Allmerica Investment Management Company, Inc. ("Manager"), an
affiliate of the Company, is the investment manager of the Trust.
The Manager has entered into agreements with investment advisers
("Sub-Advisers") selected by the Manager and Trustees in
consultation with RogersCasey. The Sub-Advisers (other than
Allmerica Asset Management, Inc.) are not affiliated with the
Company or the Trust. In addition, Rogers, Casey Sponsor
Services, Inc. a wholly owned subsidiary of RogersCasey, provides
asset allocation recommendations that may be utilized at no cost
by registered representatives who are assisting clients in
developing diversified portfolios.
The following are added to the list in the fifth paragraph under "WHO ARE THE
INVESTMENT ADVISERS OF THE FUNDS AND HOW ARE THEY SELECTED?"
SELECT EMERGING MARKETS FUND SCHRODER CAPITAL MANAGEMENT
INTERNATIONAL INC.
SELECT VALUE OPPORTUNITY FUND CRAMER ROSENTHAL MCGLYNN, LLC
SELECT STRATEGIC GROWTH FUND CAMBIAR INVESTORS, INC.
3
<PAGE>
The Fund Expenses table on page 11 of the Prospectus is deleted and the
following inserted in its place:
FUND EXPENSES: The following table shows the expenses (unaudited) of the
Underlying Funds as a percentage of average net assets for the year ended
December 31, 1997.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
OTHER FUND
MANAGEMENT EXPENSES (AFTER ANY TOTAL FUND
FUND FEE APPLICABLE REIMBURSEMENTS) EXPENSES
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Select Emerging Markets Fund@ . . . . . . . . . . . . . . . . . . 1.35% 0.65%(1) 2.00%
Select International Equity Fund . . . . . . . . . . . . . . . . . 0.92%* 0.20%(1) 1.12%(3)
T. Rowe Price International Stock Portfolio . . . . . . . . . . . 1.05% 0.00% 1.05%
Select Aggressive Growth Fund . . . . . . . . . . . . . . . . . . 0.89%* 0.09%(1) 0.98%(3)
Select Capital Appreciation Fund . . . . . . . . . . . . . . . . . 0.95%* 0.15%(1) 1.10%
Select Value Opportunity Fund . . . . . . . . . . . . . . . . . . 0.90%** 0.14%(1) 1.04%(3)
Select Growth Fund. . . . . . . . . . . . . . . . . . . . . . . . 0.85% 0.08%(1) 0.93%(3)
Select Strategic Growth Fund@ . . . . . . . . . . . . . . . . . . 0.85% 0.13%(1) 0.98%
Fidelity VIP Growth Portfolio . . . . . . . . . . . . . . . . . . 0.60% 0.09% 0.69%(2)
Select Growth and Income Fund . . . . . . . . . . . . . . . . . . 0.70%* 0.07%(1) 0.77%(3)
Fidelity VIP Equity-Income Portfolio . . . . . . . . . . . . . . . 0.50% 0.08% 0.58%(2)
Fidelity VIP High Income Portfolio . . . . . . . . . . . . . . . . 0.59% 0.12% 0.71%
Select Income Fund. . . . . . . . . . . . . . . . . . . . . . . . 0.58%* 0.13%(1) 0.71%
Money Market Fund . . . . . . . . . . . . . . . . . . . . . . . . 0.27% 0.08%(1) 0.35%
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
@ These Portfolios commenced operations in February 1998. Expenses shown are
annualized and are based on estimated amounts for the current fiscal year.
Actual expenses may be greater or less than shown.
*Effective September 1, 1997, the management fee rates for these funds were
revised. The management fees ratios shown in the table above have been adjusted
to assume that the revised rates took effect on January 1, 1997.
** The Select Value Opportunity Fund was formerly known as the "Small-Mid Cap
Value Fund." Effective April 1, 1997, the management fee rate of the former
Small-Mid Cap Value Fund was revised. In addition, effective April 1, 1997 and
until further notice, the management fee for this fund has been voluntarily
limited to an annual rate of 0.90% of average daily net assets. The management
fee ratio shown above for the Select Value Opportunity Fund has been adjusted to
assume that the revised rate and the voluntary limitation took effect on January
1, 1997. Had the voluntary limitation of 0.90% not been effective on January 1,
1997 and had the management fee rate revision discussed above been effective on
January 1, 1997, the management fee ratio and the total fund expense ratio would
have been 0.95% and 1.09%, respectively.
(1) Until further notice, Allmerica Investment Management Company, Inc.
("Manager"), under the Management Agreement with Allmerica Investment Trust, has
declared a voluntary expense limitation of 1.50% of average net assets for
Select International Equity Fund, 1.35% for Select Aggressive Growth Fund and
Select Capital Appreciation Fund, 1.25% for Select Value Opportunity Fund, 1.20%
for Select Strategic Growth and Select Growth Fund, 1.10% for Select Growth and
Income Fund, 1.00% for Select Income Fund and 0.60% for Money Market Fund. In
addition, the Manager has agreed to waive voluntarily its management fee to the
extent that expenses of the Select Emerging Markets Fund exceed 2.00% of the
Fund's average daily assets, except that such waiver shall not exceed the net
amount of management fees earned by the Manager from the fund after
4
<PAGE>
subtracting fees paid by the Manager to Schroder Capital Management
International Inc. for sub-advisory fees. The total operating expenses of
the funds of the Trust were less than their respective expense limitations
throughout 1997. The declaration of a voluntary expense limitation in any
year does not bind Allmerica Investments to declare future expense
limitations with respect to these funds.
(2) A portion of the brokerage commissions the Portfolio paid was used to reduce
Fund expenses. Including these reductions, total operating expenses would have
been 0.57% for the Fidelity VIP Equity-Income Portfolio and 0.67% for the
Fidelity VIP Growth Portfolio.
(3) These Funds have entered into agreements with brokers whereby the brokers
rebate a portion of commissions. Had these amounts been treated as reductions of
expenses, the total operating expenses would have been 1.10% for Select
International Equity Fund, 0.91% for Select Growth Fund, 0.74% for Select Growth
and Income Fund, 0.93% for Select Aggressive Growth, and 0.98% for Select Value
Opportunity Fund.
The expense tables on pages 12 and 13 of the Prospectus are deleted and replaced
with the following tables:
<TABLE>
<CAPTION>
(1) WITH SURRENDER CHARGE 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ------------------------- ------ ------- ------- --------
<S> <C> <C> <C> <C>
Select Emerging Markets Fund . . . . . . . . . . . . . . . . . . . . . . . . $94 $151 $205 $366
Select International Equity Fund . . . . . . . . . . . . . . . . . . . . . . $87 $131 $172 $301
T. Rowe Price International Stock Portfolio. . . . . . . . . . . . . . . . . $85 $126 $163 $283
Select Aggressive Growth Fund. . . . . . . . . . . . . . . . . . . . . . . . $86 $127 $165 $286
Select Capital Appreciation Fund . . . . . . . . . . . . . . . . . . . . . . $86 $129 $167 $291
Select Value Opportunity Fund. . . . . . . . . . . . . . . . . . . . . . . . $84 $123 $157 $271
Select Growth Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $84 $123 $157 $271
Select Strategic Growth Fund . . . . . . . . . . . . . . . . . . . . . . . . $84 $123 $157 $272
Fidelity VIP Growth Portfolio. . . . . . . . . . . . . . . . . . . . . . . . $82 $116 $145 $247
Select Growth and Income Fund. . . . . . . . . . . . . . . . . . . . . . . . $83 $120 $152 $261
Fidelity VIP Equity-Income Portfolio . . . . . . . . . . . . . . . . . . . . $81 $113 $140 $236
Fidelity VIP High Income Portfolio . . . . . . . . . . . . . . . . . . . . . $82 $117 $146 $249
Select Income Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $82 $118 $148 $252
Money Market Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $79 $106 $128 $211
</TABLE>
<TABLE>
<CAPTION>
(2) WITHOUT SURRENDER CHARGE 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ------------------------- ------ ------- ------- --------
<S> <C> <C> <C> <C>
Select Emerging Markets Fund . . . . . . . . . . . . . . . . . . . . . . . . $34 $104 $176 $366
Select International Equity Fund . . . . . . . . . . . . . . . . . . . . . . $27 $83 $142 $301
T. Rowe Price International Stock Portfolio. . . . . . . . . . . . . . . . . $25 $78 $133 $283
Select Aggressive Growth Fund. . . . . . . . . . . . . . . . . . . . . . . . $26 $79 $135 $286
Select Capital Appreciation Fund . . . . . . . . . . . . . . . . . . . . . . $26 $80 $137 $291
Select Value Opportunity Fund. . . . . . . . . . . . . . . . . . . . . . . . $24 $74 $127 $271
Select Growth Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $24 $74 $127 $271
Select Strategic Growth Fund . . . . . . . . . . . . . . . . . . . . . . . . $24 $74 $127 $272
Fidelity VIP Growth Portfolio. . . . . . . . . . . . . . . . . . . . . . . . $22 $67 $115 $247
Select Growth and Income Fund. . . . . . . . . . . . . . . . . . . . . . . . $23 $71 $122 $261
Fidelity VIP Equity-Income Portfolio . . . . . . . . . . . . . . . . . . . . $21 $64 $110 $236
Fidelity VIP High Income Portfolio . . . . . . . . . . . . . . . . . . . . . $22 $68 $116 $249
Select Income Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $22 $69 $118 $252
Money Market Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $18 $57 $98 $211
</TABLE>
5
<PAGE>
The performance tables on page 16 of the prospectus are deleted and replaced
with the following updated through December 31,1997 and are revised to include
information regarding the Select Value Opportunity Fund, formerly the Small-Mid
Cap Value Fund, whose inception date was 4/30/93:
TABLE 1
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDING DECEMBER 31, 1997
SINCE INCEPTION OF SUB-ACCOUNT
(ASSUMING COMPLETE WITHDRAWAL OF THE INVESTMENT)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
(UNAUDITED) SINCE
FOR YEAR INCEPTION
ENDED OF
SUB-ACCOUNT INVESTING IN UNDERLYING FUND 12/31/97 5 YEARS SUB-ACCOUNT
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Select Emerging Markets Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . N/A N/A N/A
Select International Equity Fund . . . . . . . . . . . . . . . . . . . . . . . . . . (2.87)% N/A 8.71%
T. Rowe Price International Stock Portfolio. . . . . . . . . . . . . . . . . . . . . (4.32)% N/A 6.45%
Select Aggressive Growth Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.53% N/A 16.09%
Select Capital Appreciation Fund . . . . . . . . . . . . . . . . . . . . . . . . . . 6.16% N/A 19.78%
Select Value Opportunity Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . . N/A N/A N/A
Select Growth Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.68% N/A 20.03%
Select Strategic Growth Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . N/A N/A N/A
Fidelity VIP Growth Portfolio. . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.24% N/A 20.64%
Select Growth and Income Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.29% N/A 18.27%
Fidelity VIP Equity-Income Portfolio . . . . . . . . . . . . . . . . . . . . . . . . 19.80% N/A 20.49%
Fidelity VIP High Income Portfolio . . . . . . . . . . . . . . . . . . . . . . . . . 9.51% N/A 12.97%
Select Income Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.32% N/A 0.48%
Money Market Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2.11)% N/A 2.92%
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
TABLE 2
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDING DECEMBER 31, 1997
SINCE INCEPTION OF SUB-ACCOUNT
(ASSUMING NO WITHDRAWAL OF THE INVESTMENT)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
(UNAUDITED) SINCE
FOR YEAR INCEPTION
ENDED OF
SUB-ACCOUNT INVESTING IN UNDERLYING FUND 12/31/97 5 YEARS SUB-ACCOUNT
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Select Emerging Markets Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . N/A N/A N/A
Select International Equity Fund . . . . . . . . . . . . . . . . . . . . . . . . . . 3.16% N/A 9.58%
T. Rowe Price International Stock Portfolio. . . . . . . . . . . . . . . . . . . . . 1.63% N/A 7.80%
Select Aggressive Growth Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.03% N/A 16.96%
Select Capital Appreciation Fund . . . . . . . . . . . . . . . . . . . . . . . . . . 12.66% N/A 21.13%
Select Value Opportunity Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . . N/A N/A N/A
Select Growth Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32.18% N/A 20.90%
Select Strategic Growth Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . N/A N/A N/A
Fidelity VIP Growth Portfolio. . . . . . . . . . . . . . . . . . . . . . . . . . . . 21.74% N/A 21.99%
Select Growth and Income Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.79% N/A 19.14%
Fidelity VIP Equity-Income Portfolio . . . . . . . . . . . . . . . . . . . . . . . . 26.30% N/A 21.84%
Fidelity VIP High Income Portfolio . . . . . . . . . . . . . . . . . . . . . . . . . 16.01% N/A 14.32%
Select Income Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.62% N/A 6.35%
Money Market Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.97% N/A 3.79%
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
6
<PAGE>
TABLE 1
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDING DECEMBER 31, 1997
SINCE INCEPTION OF UNDERLYING FUND
(ASSUMING COMPLETE WITHDRAWAL OF THE INVESTMENT)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
(UNAUDITED) SINCE
FOR YEAR INCEPTION OF
ENDED UNDERLYING
NAME OF UNDERLYING FUND 12/31/97 5 YEARS FUND*
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Select Emerging Markets Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . N/A N/A N/A
Select International Equity Fund . . . . . . . . . . . . . . . . . . . . . . . . . (2.87)% N/A 8.68%
T. Rowe Price International Stock Portfolio. . . . . . . . . . . . . . . . . . . . (4.32)% N/A 5.61%
Select Aggressive Growth Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . 10.53% 14.81% 17.67%
Select Capital Appreciation Fund . . . . . . . . . . . . . . . . . . . . . . . . . 6.16% N/A 19.76%
Select Value Opportunity Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . 16.56% N/A 14.87%
Select Growth Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.68% 13.22% 14.49%
Select Strategic Growth Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . N/A N/A N/A
Fidelity VIP Growth Portfolio. . . . . . . . . . . . . . . . . . . . . . . . . . . 15.24% 15.97% 15.51%
Select Growth and Income Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . 14.29% 14.58% 13.49%
Fidelity VIP Equity-Income Portfolio . . . . . . . . . . . . . . . . . . . . . . . 19.80% 18.13% 15.04%
Fidelity VIP High Income Portfolio . . . . . . . . . . . . . . . . . . . . . . . . 9.51% 11.89% 11.19%
Select Income Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.32% 4.84% 4.67%
Money Market Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2.11)% 2.69% 4.27%
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
TABLE 2
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDING DECEMBER 31, 1997
SINCE INCEPTION OF UNDERLYING FUND
(ASSUMING NO WITHDRAWAL OF THE INVESTMENT)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
(UNAUDITED) SINCE
FOR YEAR INCEPTION OF
ENDED UNDERLYING
NAME OF UNDERLYING FUND 12/31/97 5 YEARS FUND*
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Select Emerging Markets Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . N/A N/A N/A
Select International Equity Fund . . . . . . . . . . . . . . . . . . . . . . . . . 3.16% N/A 9.54%
T. Rowe Price International Stock Portfolio. . . . . . . . . . . . . . . . . . . . 1.63% N/A 6.51%
Select Aggressive Growth Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . 17.03% 15.15% 17.85%
Select Capital Appreciation Fund . . . . . . . . . . . . . . . . . . . . . . . . . 12.66% N/A 21.13%
Select Value Opportunity Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . 24.81% N/A 16.89%
Select Growth Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32.18% 13.58% 14.70%
Select Strategic Growth Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . N/A N/A N/A
Fidelity VIP Growth Portfolio. . . . . . . . . . . . . . . . . . . . . . . . . . . 21.74% 16.30% 15.51%
Select Growth and Income Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . 20.79% 14.92% 13.70%
Fidelity VIP Equity-Income Portfolio . . . . . . . . . . . . . . . . . . . . . . . 26.30% 18.43% 15.04%
Fidelity VIP High Income Portfolio . . . . . . . . . . . . . . . . . . . . . . . . 16.01% 12.27% 11.19%
Select Income Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.62% 5.34% 4.98%
Money Market Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.97% 3.22% 4.27%
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
*The inception dates for the Underlying Funds are 1/25/94 for Select
International Equity Fund; 3/31/94 for T. Rowe Price International Stock
Portfolio; 8/21/92 for Select Aggressive Growth Fund; 4/28/95 for Select Capital
Appreciation Fund; 4/30/93 for Select Value Opportunity Fund; 8/21/92 for Select
Growth Fund; 10/09/86 for Fidelity VIP Growth Portfolio; 8/21/92 for Select
Growth and
7
<PAGE>
Income Fund; 10/09/86 for Fidelity VIP Equity-Income Portfolio; 9/19/85 for
Fidelity VIP High Income Portfolio; 8/21/92 for Select Income Fund; 4/29/85
for Money Market Fund.
The following summaries of investment objectives and policies are added as the
first, sixth and eighth
summaries respectively under "INVESTMENT OBJECTIVES AND POLICIES" beginning on
page 18 of the Prospectus:
SELECT EMERGING MARKETS FUND -- seeks long-term growth of capital by
investing in the world's emerging markets. The Sub-Adviser for the
Select Emerging Markets Fund is Schroder Capital Management
International Inc.
SELECT VALUE OPPORTUNITY FUND -- seeks long-term growth of capital by
investing primarily in a diversified portfolio of common stocks of
small and mid-size companies, whose securities at the time of purchase
are considered by the Sub-Adviser to be undervalued. The Sub-Adviser
for the Select Value Opportunity Fund is Cramer Rosenthal McGlynn,
LLC.
SELECT STRATEGIC GROWTH FUND -- seeks long-term growth of capital by
investing primarily in common stocks of established companies. The
Sub-Adviser for the Select Strategic Growth Fund is Cambiar Investors,
Inc.
The following information is added as the second to the last sentence in the
last paragraph under "INVESTMENT ADVISORY SERVICES" on page 19 of the
Prospectus:
The Manager's fee, computed daily at an annual rate based on the
average daily net asset value of the Fund, will be 1.35% for Select
Emerging Markets Fund and 0.85% for Select Strategic Growth Fund.
For the Select Value Opportunity Fund, the fee will be 1.00% for net
asset value up to $100,000,000; 0.85% on the next $150,000,000; 0.80%
on the next $250,000,000; 0.75% on the next $250,000,000 and 0.70% on
the remainder.
The following information is added to the Sub-Adviser fee table on page 20 of
the Prospectus:
<TABLE>
<CAPTION>
FUND SUB-ADVISER NET ASSET VALUE RATE
- ---- ----------- --------------- ----
<S> <C> <C> <C>
Select Emerging Markets Schroder Capital Management International Inc. First $50 million 1.00%
Next $50 million 0.85%
Next $150 million 0.75%
Over 250 million 0.60%
Select Value Opportunity Cramer Rosenthal McGlynn, LLC First $100 million 0.60%
Next $150 million 0.50%
Next $250 million 0.40%
Next $250 million 0.375%
Over $750 million 0.35%
Select Strategic Growth Cambiar Investors, Inc. First $50 million 0.50%
Next $100 million 0.45%
Next $100 million 0.35%
Next $100 million 0.30%
Over $350 million 0.25%
</TABLE>
8
<PAGE>
The Allmerica Select Resource I expense tables in paragraph 7 of Appendix D are
deleted and replaced by the following tables as of 12/31/97 (unaudited):
<TABLE>
<CAPTION>
(A) WITH SURRENDER CHARGE 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ------------------------- ------ ------- ------- --------
<S> <C> <C> <C> <C>
Select Emerging Markets Fund . . . . . . . . . . . . . . . . . . . . . . . $94 $153 $208 $371
Select International Equity Fund . . . . . . . . . . . . . . . . . . . . . $86 $128 $166 $288
T. Rowe Price International Stock. . . . . . . . . . . . . . . . . . . . . $85 $126 $163 $281
Select Aggressive Growth Fund. . . . . . . . . . . . . . . . . . . . . . . $85 $124 $159 $274
Select Capital Appreciation Fund . . . . . . . . . . . . . . . . . . . . . $86 $127 $165 $286
Select Value Opportunity Fund. . . . . . . . . . . . . . . . . . . . . . . $85 $125 $161 $280
Select Growth Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . $84 $122 $157 $269
Select Strategic Growth Fund . . . . . . . . . . . . . . . . . . . . . . . $85 $124 $159 $274
Fidelity VIP Growth Portfolio. . . . . . . . . . . . . . . . . . . . . . . $82 $115 $145 $245
Select Growth and Income Fund. . . . . . . . . . . . . . . . . . . . . . . $83 $118 $149 $253
Fidelity Equity-Income Portfolio . . . . . . . . . . . . . . . . . . . . . $81 $112 $140 $233
Fidelity High Income Portfolio . . . . . . . . . . . . . . . . . . . . . . $82 $116 $146 $247
Select Income Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . $82 $116 $146 $247
Money Market Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . $79 $106 $128 $209
<CAPTION>
(B) WITHOUT SURRENDER CHARGE 1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
- ------------------------- ------ ------- ------- --------
Select Emerging Markets Fund . . . . . . . . . . . . . . . . . . . . . . . $35 $105 $178 $371
Select International Equity Fund . . . . . . . . . . . . . . . . . . . . . $26 $79 $135 $288
T. Rowe Price International Stock. . . . . . . . . . . . . . . . . . . . . $25 $77 $132 $281
Select Aggressive Growth Fund. . . . . . . . . . . . . . . . . . . . . . . $24 $75 $128 $274
Select Capital Appreciation Fund . . . . . . . . . . . . . . . . . . . . . $26 $79 $134 $286
Select Value Opportunity Fund. . . . . . . . . . . . . . . . . . . . . . . $25 $77 $131 $280
Select Growth Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . $24 $74 $126 $269
Select Strategic Growth Fund . . . . . . . . . . . . . . . . . . . . . . . $24 $75 $128 $274
Fidelity VIP Growth Portfolio. . . . . . . . . . . . . . . . . . . . . . . $22 $66 $114 $245
Select Growth and Income Fund. . . . . . . . . . . . . . . . . . . . . . . $22 $69 $118 $253
Fidelity Equity-Income Portfolio . . . . . . . . . . . . . . . . . . . . . $20 $63 $108 $233
Fidelity High Income Portfolio . . . . . . . . . . . . . . . . . . . . . . $22 $67 $115 $247
Select Income Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . $22 $67 $115 $247
Money Market Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . $18 $56 $96 $209
</TABLE>
9
<PAGE>
***
The following paragraph is added at the end of "D. TRANSFER PRIVILEGE" on page
22 of the Prospectus:
ASSET ALLOCATION MODEL REALLOCATIONS - If an Owner elects to follow an
asset allocation strategy, the Owner may preauthorize transfers in
accordance with the chosen strategy. The Company may provide
administrative or other support services to independent third parties
who provide recommendations as to such allocation strategies. However,
the Company does not engage any third parties to offer investment
allocation services of any type under this Contract, does not endorse
or review any investment allocation recommendations made by such third
parties and is not responsible for the investment allocations and
transfers transacted on the Owner's behalf. The Company does not
charge for providing additional asset allocation support services.
Additional information concerning asset allocation programs for which
the Company is currently providing support services may be obtained
from a registered representative or the Company.
Supplement Dated February 10, 1998
10
<PAGE>
ALLMERICA SELECT SEPARATE ACCOUNT
FIRST ALLMERICA FINANCIAL LIFE INSURANCE COMPANY
SUPPLEMENT TO STATEMENT OF ADDITIONAL INFORMATION
DATED MAY 1, 1997
***
The third and fourth paragraphs of page 2 under "GENERAL INFORMATION AND
HISTORY" are revised in their entirety to read as follows:
Currently, 14 Sub-Accounts of the Variable Account are available under
the Contract. Each Sub-Account invests in a corresponding investment
portfolio of Allmerica Investment Trust ("Trust"), Variable Insurance
Products Fund ("Fidelity VIP") or T. Rowe Price International Series,
Inc. ("T. Rowe Price").
The Trust, Fidelity VIP and T. Rowe Price are open-end, diversified
management investment companies. Ten different funds of the Trust
are available under the Contract: Select Emerging Markets Fund,
Select International Equity Fund, Select Aggressive Growth Fund,
Select Capital Appreciation Fund, Select Value Opportunity Fund,
Select Growth Fund, Select Strategic Growth Fund, Select Growth and
Income Fund, Select Income Fund and Money Market Fund. Three of the
portfolios of Fidelity VIP are available under the Contract: Fidelity
VIP High Income Portfolio, Fidelity VIP Equity-Income Portfolio and
Fidelity VIP Growth Portfolio. One portfolio of T. Rowe Price is
available under the Contract: the T. Rowe Price International Stock
Portfolio. Each Fund, Portfolio and Series available under the
Contract (together, the "Underlying Funds") has its own investment
objectives and certain attendant risks.
The following is added as the third paragraph under "Experts" on page 3:
The financial statements of the Company and the Allmerica Select
Separate Account for the period ending September 30, 1997 included
herewith are unaudited.
The first sentence under "YIELD AND EFFECTIVE YIELD-MONEY MARKET SUB-ACCOUNT"
is deleted and replaced by the following: Set forth below is yield and
effective yield information for the Money Market Sub-Account for the seven-day
period ended December 31, 1997 (unaudited):
Yield 4.95 %
Effective Yield 5.08 %
Footnote 23 under "Notes to Financial Statements" on page F-37 is deleted and
replaced in its entirety with the following:
<PAGE>
23. SUBSEQUENT EVENTS (UNAUDITED)
On April 14, 1997, the Company entered into an agreement in principle
to transfer the Company's individual disability income business under
a 100% coinsurance agreement to Metropolitan Life Insurance Company.
The coinsurance agreement became effective October 1, 1997. The
transaction has resulted in the recognition of a $53.9 million pre-tax
loss in the first quarter of 1997.
On July 16, 1997, Allmerica Financial Corporation announced the
closing of the merger ("Merger") of Allmerica P&C and AFC. Through
the transaction, AFC acquired the approximately 24.2 million shares of
Allmerica P&C that it did not already own, indirectly through FAFLIC,
for approximately $426 million in cash and 9.7 million shares of AFC
common stock. On July 15, 1997, the Certificate of Incorporation of
Allmerica P&C was amended and restated to authorize a Class B Common
Stock of Allmerica P&C, $5.00 par value. Immediately prior to
consummation of the Merger, each share of Allmerica P&C Common Stock
owned by AFC and its subsidiaries was exchanged for one share of Class
B Common Stock.
In late July 1997, a lawsuit was instituted in Louisiana against
Allmerica Financial Corporation and certain of its subsidiaries,
including the Company, by individual plaintiffs alleging fraud, unfair
or deceptive acts, breach of contracts, misrepresentation and related
claims in the sale of life insurance policies. In October 1997,
plaintiffs voluntarily dismissed the Louisiana suit and refiled the
action in Federal District Court in Worcester, Massachusetts. The
plaintiffs seek to be certified as a class. The case is in the early
stages of discovery and the Company is evaluating the claims,
Although the Company believes it has meritorious defenses to
plaintiffs' claims, there can be no assurance that the claims will be
resolved on a basis which is satisfactory to the Company.
Supplement Dated February 10, 1998
<PAGE>
FIRST ALLMERICA FINANCIAL LIFE INSURANCE COMPANY
(A WHOLLY OWNED SUBSIDIARY OF ALLMERICA FINANCIAL CORPORATION)
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
NINE
QUARTER ENDED MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
(IN MILLIONS) 1997 1996 1997 1996
----------------------------------------------- ------- ------- --------- ---------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
REVENUES
Premiums................................... $ 585.6 $ 557.1 $ 1,726.7 $ 1,658.4
Universal life and investment product
policy fees.............................. 61.4 49.9 174.8 144.9
Net investment income...................... 162.1 173.3 488.2 499.6
Net realized investment gains (losses)..... 19.1 (0.4) 60.8 53.7
Other income............................... 29.5 26.9 86.4 79.8
------- ------- --------- ---------
Total revenues......................... 857.7 806.8 2,536.9 2,436.4
------- ------- --------- ---------
BENEFITS, LOSSES AND EXPENSES
Policy benefits, claims, losses and loss
adjustment expenses...................... 515.1 474.6 1,516.1 1,457.3
Policy acquisition expenses................ 117.3 113.1 353.9 348.8
Loss from cession of disability income
business................................. -- -- 53.9 --
Other operating expenses................... 126.8 125.9 382.6 363.9
------- ------- --------- ---------
Total benefits, losses and expenses.... 759.2 713.6 2,306.5 2,170.0
------- ------- --------- ---------
Income before federal income taxes............. 98.5 93.2 230.4 266.4
------- ------- --------- ---------
FEDERAL INCOME TAX EXPENSE (BENEFIT)
Current.................................... 34.7 37.2 67.7 81.5
Deferred................................... (7.7) (11.6) (11.2) (19.1)
------- ------- --------- ---------
Total federal income tax expense....... 27.0 25.6 56.5 62.4
------- ------- --------- ---------
Income before minority interest................ 71.5 67.6 173.9 204.0
Minority interest.............................. (14.4) (21.2) (55.6) (59.6)
------- ------- --------- ---------
Net income..................................... $ 57.1 $ 46.4 $ 118.3 $ 144.4
------- ------- --------- ---------
------- ------- --------- ---------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL
STATEMENTS.
UF-1
<PAGE>
FIRST ALLMERICA FINANCIAL LIFE INSURANCE COMPANY
(A WHOLLY OWNED SUBSIDIARY OF ALLMERICA FINANCIAL CORPORATION)
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
DECEMBER 31,
(IN MILLIONS) 1996
- ------------------------------------------------------------------------------------ SEPTEMBER 30, ------------
1997
-------------
(UNAUDITED)
<S> <C> <C>
ASSETS
Investments:
Fixed maturities at fair value (amortized cost of $7,062.9 and $7,279.1)........ $ 7,341.2 $ 7,461.5
Equity securities at fair value (cost of $284.7 and $327.9)..................... 475.6 473.1
Mortgage loans.................................................................. 564.7 650.1
Real estate..................................................................... 72.5 120.7
Policy loans.................................................................... 139.3 132.4
Other long term investments..................................................... 125.6 128.8
------------- ------------
Total investments........................................................... 8,718.9 8,966.6
------------- ------------
Cash and cash equivalents....................................................... 159.5 175.9
Accrued investment income....................................................... 140.7 148.6
Deferred policy acquisition costs............................................... 881.2 822.7
Reinsurance receivables on paid and unpaid losses, benefits and unearned
premiums....................................................................... 828.9 875.6
Deferred federal income taxes................................................... 33.3 93.2
Premiums, accounts and notes receivable......................................... 548.4 533.0
Other assets.................................................................... 504.9 302.2
Closed block assets............................................................. 805.6 811.8
Separate account assets......................................................... 9,233.6 6,233.0
------------- ------------
Total assets................................................................ $21,855.0 $ 18,962.6
------------- ------------
LIABILITIES
Policy liabilities and accruals:
Future policy benefits.......................................................... $ 2,591.3 $ 2,613.7
Outstanding claims, losses and loss adjustment expenses......................... 2,852.0 2,944.1
Unearned premiums............................................................... 869.7 822.5
Contractholder deposit funds and other policy liabilities....................... 1,724.7 2,060.4
------------- ------------
Total policy liabilities and accruals....................................... 8,037.7 8,440.7
------------- ------------
Expenses and taxes payable........................................................ 677.2 615.3
Reinsurance premiums payable...................................................... 45.6 31.4
Short-term debt................................................................... 48.2 38.4
Deferred federal income taxes..................................................... -- 34.6
Long-term debt.................................................................... 2.7 2.7
Closed block liabilities.......................................................... 881.3 892.1
Separate account liabilities...................................................... 9,228.0 6,227.2
------------- ------------
Total liabilities........................................................... 18,920.7 16,282.4
------------- ------------
Minority interest................................................................. 866.0 784.0
Committments and contingencies
SHAREHOLDER'S EQUITY
Common stock, $10 par value, 1 million shares authorized, 500,000 shares issued
and
outstanding..................................................................... 5.0 5.0
Additional paid in capital........................................................ 392.5 392.4
Unrealized appreciation on investments, net....................................... 185.1 131.4
Retained earnings................................................................. 1,485.7 1,367.4
------------- ------------
Total shareholder's equity.................................................. 2,068.3 1,896.2
------------- ------------
Total liabilities and shareholder's equity.................................. $21,855.0 $ 18,962.6
------------- ------------
------------- ------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL
STATEMENTS.
UF-2
<PAGE>
FIRST ALLMERICA FINANCIAL LIFE INSURANCE COMPANY
(A WHOLLY OWNED SUBSIDIARY OF ALLMERICA FINANCIAL CORPORATION)
CONSOLIDATED STATEMENTS OF SHAREHOLDER'S EQUITY
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
(IN MILLIONS) 1997 1996
- ------------------------------------------------------------------------------------------ ---------- ----------
(UNAUDITED)
<S> <C> <C>
COMMON STOCK
Balance at beginning and end of period................................................ $ 5.0 $ 5.0
---------- ----------
ADDITIONAL PAID-IN-CAPITAL
Balance at beginning of period........................................................ 392.4 392.4
Capital paid in....................................................................... .1 --
---------- ----------
Balance at end of period.............................................................. 392.5 392.4
---------- ----------
RETAINED EARNINGS
Balance at beginning of period........................................................ 1,367.4 1,173.9
Net income............................................................................ 118.3 144.4
---------- ----------
Balance at end of period.............................................................. 1,485.7 1,318.3
---------- ----------
NET UNREALIZED APPRECIATION ON INVESTMENTS
Balance at beginning of period........................................................ 131.4 153.0
Net appreciation (depreciation) on available for sale securities...................... 109.0 (126.3)
(Provision) benefit for deferred federal income taxes................................. (28.9) 36.5
Minority interest..................................................................... (26.4) 20.4
---------- ----------
Balance at end of period.............................................................. 185.1 83.6
---------- ----------
Total shareholder's equity........................................................ $ 2,068.3 $ 1,799.3
---------- ----------
---------- ----------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL
STATEMENTS.
UF-3
<PAGE>
FIRST ALLMERICA FINANCIAL LIFE INSURANCE COMPANY
(A WHOLLY OWNED SUBSIDIARY OF ALLMERICA FINANCIAL CORPORATION)
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
(IN MILLIONS) 1997 1996
- ---------------------------------------------------------------------------------------- ----------- -----------
(UNAUDITED)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income.......................................................................... $ 118.3 $ 144.4
Adjustments to reconcile net income to net cash provided by operating activities:
Minority interest............................................................... 55.6 59.6
Net realized gains.............................................................. (61.9) (53.9)
Net amortization and depreciation............................................... 20.3 34.3
Deferred federal income taxes................................................... (11.2) (18.9)
Change in deferred acquisition costs............................................ (70.2) (55.7)
Change in premiums and notes receivable, net of reinsurance..................... (0.9) (20.4)
Change in accrued investment income............................................. 7.2 6.6
Change in policy liabilities and accruals, net.................................. (86.1) (31.3)
Change in reinsurance receivable................................................ 46.8 30.2
Change in expenses and taxes payable............................................ 52.8 0.4
Separate account activity, net.................................................. 0.2 5.6
Other, net...................................................................... (13.2) 45.5
----------- -----------
Net cash provided by operating activities................................... 57.7 146.4
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from disposals and maturities of available-for-sale fixed maturities....... 2,040.8 3,052.1
Proceeds from disposals of equity securities........................................ 126.6 218.3
Proceeds from disposals of other investments........................................ 96.0 60.3
Proceeds from mortgages matured or collected........................................ 157.4 122.9
Purchase of available-for-sale fixed maturities..................................... (2,033.4) (3,223.9)
Purchase of equity securities....................................................... (45.8) (80.4)
Purchase of other investments....................................................... (94.3) (91.1)
Capital expenditures................................................................ (5.4) (8.0)
Other investing activities, net..................................................... 1.2 2.7
----------- -----------
Net cash provided by investing activities................................... 243.1 52.9
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Deposits and interest credited to contractholder deposit funds...................... 173.8 241.6
Withdrawals from contractholder deposit funds....................................... (501.2) (790.4)
Change in short-term debt........................................................... 9.8 298.1
Change in long-term debt............................................................ (0.1) (0.1)
Dividends paid to minority shareholders............................................. (2.4) (2.9)
Proceeds from capital paid in....................................................... 0.1 --
Subsidiary treasury stock purchased, at cost........................................ -- (42.0)
----------- -----------
Net cash used in financing activities....................................... (320.0) (295.7)
----------- -----------
Net change in cash and cash equivalents................................................. (19.2) (96.4)
Net change in cash held in the Closed Block............................................. 2.8 11.2
Cash and cash equivalents, beginning of period.......................................... 175.9 236.6
----------- -----------
Cash and cash equivalents, end of period................................................ $ 159.5 $ 151.4
----------- -----------
----------- -----------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL
STATEMENTS.
UF-4
<PAGE>
FIRST ALLMERICA FINANCIAL LIFE INSURANCE COMPANY
(A WHOLLY OWNED SUBSIDIARY OF ALLMERICA FINANCIAL CORPORATION)
1. BASIS OF PRESENTATION
First Allmerica Financial Life Insurance Company ("FAFLIC" or "the Company") is
a wholly owned subsidiary of Allmerica Financial Corporation ("AFC"). The
accompanying unaudited consolidated financial statements of FAFLIC have been
prepared in accordance with generally accepted accounting principles for stock
life insurance companies for interim financial information.
The interim consolidated financial statements of FAFLIC include the accounts of
FAFLIC, its wholly-owned life insurance subsidiary, Allmerica Financial Life
Insurance and Annuity Company ("AFLIAC"), non-insurance subsidiaries
(principally brokerage and investment advisory subsidiaries), and Allmerica
Property & Casualty Companies, Inc. ("Allmerica P&C", a 59.5%-owned
non-insurance holding company). The Closed Block assets and liabilities at
September 30, 1997 and December 31, 1996 are presented in the consolidated
financial statements as single line items. Results of operations for the Closed
Block for the nine month and three month periods ended September 30, 1997 and
1996 are included in other income in the consolidated financial statements. All
significant intercompany accounts and transactions have been eliminated.
Minority interest relates to the Company's investment in Allmerica P&C and its
subsidiary, The Hanover Insurance Company ("Hanover"). Hanover's 82.5%-owned
subsidiary is Citizens Corporation, the holding company for Citizens Insurance
Company of America ("Citizens"). Minority interest also includes an amount
related to the minority interest in Citizens Corporation.
The accompanying interim consolidated financial statements reflect, in the
opinion of the Company's management, all adjustments, consisting of only normal
and recurring adjustments, necessary for a fair presentation of the financial
position and results of operations. Certain reclassifications have been made to
the 1996 consolidated statements of income in order to conform to the 1997
presentation. The results of operations for the nine months ended and quarter
ended September 30, 1997 are not necessarily indicative of the results to be
expected for the full year. These financial statements should be read in
conjunction with the annual audited financial statements.
In June 1997, the FASB issued Statement of Financial Accounting Standards No.
130, "Reporting Comprehensive Income" (FAS No. 130). FAS No. 130 established
standards for the reporting and display of comprehensive income and its
components in a full set of general-purpose financial statements. All items that
are required to be recognized under accounting standards as components of
comprehensive income are to be reported in a financial statement that is
displayed with the same prominence as other financial statements. This statement
stipulates that comprehensive income reflect the change in equity of an
enterprise during a period from transactions and other events and circumstances
from non-owner sources. Comprehensive income will thus represent the sum of net
income and other comprehensive income, although FAS No. 130 does not require the
use of the terms comprehensive income or other comprehensive income. The
accumulated balance of other comprehensive income shall be displayed separately
from retained earnings and additional paid-in capital in the statement of
financial position. This statement is effective for fiscal years beginning after
December 15, 1997. The Company anticipates that the adoption of FAS No. 130 will
result primarily in reporting unrealized gains and losses on investments in debt
and equity securities in comprehensive income.
In June 1997, the FASB also issued Statement of Financial Accounting Standards
No. 131, "Disclosures About Segments of an Enterprise and Related Information"
(FAS No. 131). FAS No. 131 establishes standards for the way that public
enterprises report information about operating segments in annual financial
UF-5
<PAGE>
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
statements and requires that selected information about those operating segments
be reported in interim financial statements. This statement supersedes Statement
of Financial Accounting Standards No. 14, "Financial Reporting for Segments of a
Business Enterprise" (FAS No. 14). FAS No. 131 requires that all public
enterprises report financial and descriptive information about its reportable
operating segments. Operating segments are defined as components of an
enterprise about which separate financial information is available that is
evaluated regularly by the chief operating decision maker in deciding how to
allocate resources and in assessing performance. This statement is effective for
fiscal years beginning after December 15, 1997. The Company is currently
determining the impact of the adoption of FAS No. 131.
2. SIGNIFICANT TRANSACTIONS
In July 1997, Hanover reached an agreement with Travelers Property Casualty to
facilitate Travelers' writing of certain Hanover Insurance policies, as they
expire, in Alabama, California, Kansas, Mississippi, Missouri, and Texas. In
these six states, Hanover has approximately 250 agents generating approximately
$90 million in premium annually. Hanover intends to cease writing personal and
commercial policies in these states except for employer and
association-sponsored group property and casualty business, surety bonds and
specialty program commercial policies. The plan is conditioned upon the
appropriate regulatory approval in each state.
On April 14, 1997, the Company entered into an agreement in principle to
transfer the Company's individual disability income business under a 100%
coinsurance agreement to Metropolitan Life Insurance Company. The coinsurance
agreement became effective October 1, 1997. The transaction has resulted in the
recognition of a $53.9 million pre-tax loss in the first quarter of 1997.
3. PARENT COMPANY TRANSACTIONS
On July 16, 1997, AFC acquired all of the outstanding common stock of Allmerica
P&C that it did not already own, through its ownership of FAFLIC, in exchange
for cash of $425.6 million and approximately 9.7 million shares of AFC stock
valued at $372.5 million. Pursuant to the merger, each outstanding share of
Allmerica P&C Common Stock, other than those shares owned by the Company or its
subsidiaries, became a right to receive $17.60 in cash, without interest, and
0.4 shares of AFC Common Stock, resulting in the issuance of approximately 9.7
million shares of AFC Common Stock. On July 15, 1997, the Certificate of
Incorporation of Allmerica P&C was amended and restated to authorize a class B
common stock of Allmerica P&C, $5.00 par value. Each share of Allmerica P&C
Common Stock owned by the Company or its subsidiaries was exchanged for one
share of Class B Common Stock immediately prior to the consummation of the
merger.
In June 1997, AFC entered into a credit agreement with The Chase Manhattan Bank
("Chase") providing for a $225 million revolving line of credit that expires on
December 15, 1997. Borrowings under the line of credit are unsecured and bear
interest at a rate per annum equal to, at AFC's option, Chase's base rate or the
eurodollar rate plus an applicable margin. The credit agreement requires AFC to
comply with certain financial ratios. As of September 30, 1997, AFC had borrowed
$140.0 million under the line of credit provided by this credit agreement.
On February 3, 1997, AFC Capital Trust (the "Trust"), a wholly-owned subsidiary
business trust of AFC, issued $300.0 million Series A Capital Securities
("Capital Securities"), which pay cumulative dividends at a rate of 8.207%
semiannually commencing August 15, 1997. The Trust exists for the sole purpose
of issuing the Capital Securities and investing the proceeds thereof in an
equivalent amount of 8.207% Junior Subordinated Deferrable Interest Debentures
due 2027 of AFC (the "Subordinated Debentures"). Through certain guarantees, the
Subordinated Debentures and the terms of related agreements, AFC has irrevocably
and unconditionally guaranteed the obligations of the Trust under the Capital
Securities. Net proceeds from the offering of approximately $296.3 million
funded a portion of the acquisition of the 24.2 million publicly held shares of
Allmerica P&C pursuant to the merger on July 16, 1997. On August 7, 1997, AFC
and the Trust
UF-6
<PAGE>
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
exchanged the Series A Capital Securities for a like amount of Series B Capital
Securities and related guarantees which are registered under the Securities Act
of 1933 as required under the terms of the initial transaction. During the nine
months ended September 30, 1997, $12.3 million in distributions was paid on the
Capital Securities.
Dividends from the Company are one of the sources of cash for repayment of the
above-mentioned debt by AFC.
4. FEDERAL INCOME TAXES
Federal income tax expense for the periods ended September 30, 1997 and 1996,
has been computed using estimated effective tax rates. These rates are revised,
if necessary, at the end of each successive interim period to reflect the
current estimates of the annual effective tax rates.
5. CLOSED BLOCK
Included in other income in the Consolidated Statements of Income in the third
quarter and first nine months of 1997 and 1996 is a net pre-tax contribution
from the Closed Block of $2.3 million and $8.3 million, and $1.9 million and
$7.9 million, respectively. Summarized financial information of the Closed Block
is as follows:
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
(IN MILLIONS) 1997 1996
- --------------------------------------------------------------------------- ------------------ -----------------
<S> <C> <C>
(UNAUDITED)
ASSETS
Fixed maturities-at fair value (amortized cost of $414.4 and $397.2)..... $ 421.0 $ 403.9
Mortgage loans........................................................... 101.5 114.5
Policy loans............................................................. 223.2 230.2
Cash and cash equivalents................................................ 21.3 24.1
Accrued investment income................................................ 15.0 14.3
Deferred policy acquisition costs........................................ 18.8 21.1
Other assets............................................................. 4.8 3.7
------ ------
Total assets........................................................... $ 805.6 $ 811.8
------ ------
------ ------
LIABILITIES
Policy liabilities and accruals.......................................... $ 875.7 $ 883.4
Other liabilities........................................................ 5.6 8.7
------ ------
Total liabilities...................................................... $ 881.3 $ 892.1
------ ------
------ ------
</TABLE>
UF-7
<PAGE>
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
NINE MONTHS ENDED
QUARTER ENDED
SEPTEMBER 30, SEPTEMBER 30,
-------------------- --------------------
(IN MILLIONS) 1997 1996 1997 1996
- ------------------------------------------------------------------------------- --------- --------- --------- ---------
<S> <C> <C> <C> <C>
(UNAUDITED) (UNAUDITED)
REVENUES
Premiums..................................................................... $ 9.3 $ 10.4 $ 48.3 $ 50.9
Net investment income........................................................ 13.1 13.3 39.8 39.4
Net realized investment gains (losses)....................................... 0.1 (0.2) 1.1 0.2
--------- --------- --------- ---------
Total revenues............................................................. 22.5 23.5 89.2 90.5
--------- --------- --------- ---------
BENEFITS AND EXPENSES
Policy benefits.............................................................. 19.3 20.7 78.4 79.8
Policy acquisition expenses.................................................. 0.7 0.7 2.1 2.3
Other operating expenses..................................................... 0.2 0.2 0.4 0.5
--------- --------- --------- ---------
Total benefits and expenses................................................ 20.2 21.6 80.9 82.6
--------- --------- --------- ---------
Contribution from the Closed Block....................................... $ 2.3 $ 1.9 $ 8.3 $ 7.9
--------- --------- --------- ---------
--------- --------- --------- ---------
</TABLE>
Many expenses related to Closed Block operations are charged to operations
outside the Closed Block; accordingly, the contribution from the Closed Block
does not represent the actual profitability of the Closed Block operations.
Operating costs and expenses outside of the Closed Block are, therefore,
disproportionate to the business outside the Closed Block.
6. SEGMENT INFORMATION
The Company offers financial products and services in two major areas: Risk
Management and Retirement and Asset Management. Within these broad areas, the
Company conducts business principally in five operating segments.
The Risk Management group includes two segments: Regional Property and Casualty
and Corporate Risk Management Services. The Regional Property and Casualty
segment includes property and casualty insurance products, such as automobile
insurance, homeowners insurance, commercial multiple-peril insurance, and
workers' compensation insurance. These products are offered by Allmerica P&C
through its operating subsidiaries, Hanover and Citizens. Substantially all of
the Regional Property and Casualty segment's earnings are generated in Michigan
and the Northeast (Connecticut, Massachusetts, New York, New Jersey, New
Hampshire, Rhode Island, Vermont and Maine). The Corporate Risk Management
Services segment includes group life and health insurance products and services
which assist employers in administering employee benefit programs and in
managing the related risks.
The Retirement and Asset Management group includes three segments: Retail
Financial Services, Institutional Services and Allmerica Asset Management. The
Retail Financial Services segment includes variable annuities, variable
universal life, and traditional insurance products distributed via retail
channels to individuals across the country. The Institutional Services segment
primarily includes group retirement products such as 401(k) plans, tax-sheltered
annuities and GIC contracts which are distributed to institutions across the
country via worksite marketing and other arrangements. Allmerica Asset
Management is a Registered Investment Advisor which provides investment advisory
services, primarily to affiliates, and to other institutions, such as insurance
companies and pension plans.
UF-8
<PAGE>
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
Summarized below is financial information with respect to business segments for
the periods indicated.
<TABLE>
<CAPTION>
QUARTER ENDED NINE MONTHS ENDED
SEPTEMBER 30,] SEPTEMBER 30,
-------------------- ----------------------
(IN MILLIONS) 1997 1996 1997 1996
- ---------------------------------------------------------------------- --------- --------- ---------- ----------
<S> <C> <C> <C> <C>
(UNAUDITED) (UNAUDITED)
Revenues:
Risk Management
Regional Property and Casualty.................................... $ 577.3 $ 540.2 $ 1,707.1 $ 1,638.1
Corporate Risk Management Services................................ 100.1 90.7 294.2 267.1
--------- --------- ---------- ----------
Subtotal........................................................ 677.4 630.9 2,001.3 1,905.2
--------- --------- ---------- ----------
Retirement and Asset Management
Retail Financial Services......................................... 119.9 112.2 353.5 332.7
Institutional Services............................................ 60.5 64.6 183.1 201.7
Allmerica Asset Management........................................ 2.1 1.7 6.4 6.2
--------- --------- ---------- ----------
Subtotal........................................................ 182.5 178.5 543.0 540.6
--------- --------- ---------- ----------
Eliminations........................................................ (2.2) (2.6) (7.4) (9.4)
--------- --------- ---------- ----------
Total............................................................. $ 857.7 $ 806.8 $ 2,536.9 $ 2,436.4
--------- --------- ---------- ----------
--------- --------- ---------- ----------
Income (loss) from continuing operations before income taxes:
Risk Management
Regional Property and Casualty.................................... $ 47.3 $ 57.8 $ 157.1 $ 162.4
Corporate Risk Management Services................................ 6.7 3.7 12.9 11.2
--------- --------- ---------- ----------
Subtotal........................................................ 54.0 61.5 170.0 173.6
--------- --------- ---------- ----------
Retirement and Asset Management
Retail Financial Services......................................... 27.2 18.9 15.2 54.0
Institutional Services............................................ 16.8 12.8 44.1 38.3
Allmerica Asset Management........................................ 0.5 -- 1.1 0.5
--------- --------- ---------- ----------
Subtotal........................................................ 44.5 31.7 60.4 92.8
--------- --------- ---------- ----------
Total............................................................. $ 98.5 $ 93.2 $ 230.4 $ 266.4
--------- --------- ---------- ----------
--------- --------- ---------- ----------
</TABLE>
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
(IN MILLIONS) 1997 1996
- ------------------------------------------------------------------------------------ ------------- ------------
<S> <C> <C>
(UNAUDITED)
Identifiable assets:
Risk Management
Regional Property and Casualty.................................................. $ 5,837.4 $ 5,703.9
Corporate Risk Management Services.............................................. 560.5 506.0
------------- ------------
Subtotal...................................................................... 6,397.9 6,209.9
------------- ------------
Retirement and Asset Management
Retail Financial Services....................................................... 11,454.0 8,871.3
Institutional Services.......................................................... 3,998.8 3,879.0
Allmerica Asset Management...................................................... 4.3 2.4
------------- ------------
Subtotal...................................................................... 15,457.1 12,752.7
------------- ------------
Total........................................................................... $ 21,855.0 $ 18,962.6
------------- ------------
------------- ------------
</TABLE>
UF-9
<PAGE>
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
7. COMMITMENTS AND CONTINGENCIES
In late July 1997, a lawsuit was instituted in Louisiana against AFC and certain
of its subsidiaries by individual plaintiffs alleging fraud, unfair or deceptive
acts, breach of contract, misrepresentation and related claims in the sale of
life insurance policies. In October 1997, plaintiffs voluntarily dismissed the
Louisiana suit and refiled the action in Federal District Court in Worcester,
Massachusetts. The plaintiffs seek to be certified as a class. The case is in
early stages of discovery and the Company is evaluating the claims. Although the
Company believes it has meritorious defenses to plaintiffs' claims, there can be
no assurance that the claims will be resolved on a basis which is satisfactory
to the Company.
UF-10
<PAGE>
ALLMERICA SELECT SEPARATE ACCOUNT
STATEMENTS OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
SELECT
AGGRESSIVE SELECT SELECT GROWTH SELECT
GROWTH GROWTH AND INCOME INCOME
------------- ------------ ------------- ------------
<S> <C> <C> <C> <C>
ASSETS:
Investments in shares of Allmerica Investment Trust. . . . . . . . $ 10,073,254 $ 9,675,857 $ 14,279,876 $ 6,872,471
Investments in shares of Fidelity Variable Insurance Products Fund - - - -
Investment in shares of T. Rowe Price International Series, Inc. . - - - -
Receivable from First Allmerica Financial Life Insurance
Company (Sponsor). . . . . . . . . . . . . . . . . . . . . . . . - - - -
------------- ------------ ------------- ------------
Total assets . . . . . . . . . . . . . . . . . . . . . . . . 10,073,254 9,675,857 14,279,876 6,872,471
LIABILITIES:
Payable to First Allmerica Financial Life Insurance
Company (Sponsor). . . . . . . . . . . . . . . . . . . . . . . . - - - -
------------- ------------ ------------- ------------
Net assets . . . . . . . . . . . . . . . . . . . . . . . . . $ 10,073,254 $ 9,675,857 $ 14,279,876 $ 6,872,471
------------- ------------ ------------- ------------
------------- ------------ ------------- ------------
Net asset distribution by category:
Qualified variable annuity policies. . . . . . . . . . . . . . . $ 3,459,127 $ 3,637,340 $ 6,134,463 $ 2,940,458
Non-qualified variable annuity policies. . . . . . . . . . . . . 6,614,127 6,048,517 8,135,075 3,921,722
Value of annuitant mortality fluctuation reserve . . . . . . . . - - 10,338 10,291
------------- ------------ ------------- ------------
$ 10,073,254 $ 9,675,857 $ 14,279,876 $ 6,872,471
------------- ------------ ------------- ------------
------------- ------------ ------------- ------------
Qualified units outstanding, September 30, 1997. . . . . . . . . . 1,745,555 1,849,523 3,234,132 2,394,149
Net asset value per qualified unit, September 30, 1997 . . . . . . 1.981677 1.961230 1.896788 1.228185
Non-qualified units outstanding, September 30, 1997. . . . . . . . 3,337,641 3,084,043 4,294,319 3,201,483
Net asset value per non-qualified unit, September 30, 1997 . . . . $ 1.981677 $ 1.961230 $ 1.896788 $ 1.228185
<CAPTION>
SELECT SELECT
MONEY INTERNATIONAL CAPITAL FIDELITY VIP
MARKET EQUITY APPRECIATION HIGH INCOME
------------- ------------- ------------- ------------
<S> <C> <C> <C> <C>
ASSETS:
Investments in shares of Allmerica Investment Trust. . . . . . . . $ 6,493,288 $ 7,065,025 $ 3,134,988 -
Investments in shares of Fidelity Variable Insurance Products Fund - - - $ 3,477,417
Investment in shares of T. Rowe Price International Series, Inc. . - - - -
Receivable from First Allmerica Financial Life Insurance
Company (Sponsor). . . . . . . . . . . . . . . . . . . . . . . . - - - -
------------- ------------ ------------- ------------
Total assets . . . . . . . . . . . . . . . . . . . . . . . . 6,493,288 7,065,025 3,134,988 3,477,417
LIABILITIES:
Payable to First Allmerica Financial Life Insurance
Company (Sponsor). . . . . . . . . . . . . . . . . . . . . . . . - - - -
------------- ------------ ------------- ------------
Net assets . . . . . . . . . . . . . . . . . . . . . . . . . $ 6,493,288 $ 7,065,025 $ 3,134,988 $ 3,477,417
------------- ------------ ------------- ------------
------------- ------------ ------------- ------------
Net asset distribution by category:
Qualified variable annuity policies. . . . . . . . . . . . . . . $ 3,053,815 $ 2,255,936 $ 1,096,853 $ 1,211,634
Non-qualified variable annuity policies. . . . . . . . . . . . . 3,429,368 4,809,089 2,038,135 2,265,783
Value of annuitant mortality fluctuation reserve . . . . . . . . 10,105 - - -
------------- ------------ ------------- ------------
$ 6,493,288 $ 7,065,025 $ 3,134,988 $ 3,477,417
------------- ------------ ------------- ------------
------------- ------------ ------------- ------------
Qualified units outstanding, September 30, 1997. . . . . . . . . . 2,680,821 1,534,034 667,891 852,239
Net asset value per qualified unit, September 30, 1997 . . . . . . 1.139134 1.470591 1.642264 1.421707
Non-qualified units outstanding, September 30, 1997. . . . . . . . 3,019,375 3,270,174 1,241,052 1,593,706
Net asset value per non-qualified unit, September 30, 1997 . . . . $ 1.139134 $ 1.470591 $ 1.642264 $ 1.421707
<CAPTION>
T. ROWE PRICE
FIDELITY VIP FIDELITY VIP INTERNATIONAL
EQUITY-INCOME GROWTH STOCK
------------- ------------- -------------
<S> <C> <C> <C>
ASSETS:
Investments in shares of Allmerica Investment Trust. . . . . . . . - - -
Investments in shares of Fidelity Variable Insurance Products Fund $ 5,116,429 $ 3,316,540 -
Investment in shares of T. Rowe Price International Series, Inc. . - - $ 2,120,159
Receivable from First Allmerica Financial Life Insurance
Company (Sponsor). . . . . . . . . . . . . . . . . . . . . . . . - - -
------------- ------------ -------------
Total assets . . . . . . . . . . . . . . . . . . . . . . . . 5,116,429 3,316,540 2,120,159
LIABILITIES:
Payable to First Allmerica Financial Life Insurance
Company (Sponsor). . . . . . . . . . . . . . . . . . . . . . . . - - -
------------- ------------ -------------
Net assets . . . . . . . . . . . . . . . . . . . . . . . . . $ 5,116,429 $ 3,316,540 $ 2,120,159
------------- ------------ -------------
------------- ------------ -------------
Net asset distribution by category:
Qualified variable annuity policies. . . . . . . . . . . . . . . $ 2,018,841 $ 1,391,955 $ 859,714
Non-qualified variable annuity policies. . . . . . . . . . . . . 3,097,588 1,924,585 1,260,445
Value of annuitant mortality fluctuation reserve . . . . . . . . - - -
------------- ------------ -------------
$ 5,116,429 $ 3,316,540 $ 2,120,159
------------- ------------ -------------
------------- ------------ -------------
Qualified units outstanding, September 30, 1997. . . . . . . . . . 1,210,373 808,928 650,587
Net asset value per qualified unit, September 30, 1997 . . . . . . 1.667950 1.720740 1.321442
Non-qualified units outstanding, September 30, 1997. . . . . . . . 1,857,123 1,118,463 953,841
Net asset value per non-qualified unit, September 30, 1997 . . . . $ 1.667950 $ 1.720740 $ 1.321442
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
ALLMERICA SELECT SEPARATE ACCOUNT
STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
SELECT
AGGRESSIVE SELECT SELECT GROWTH SELECT
GROWTH GROWTH AND INCOME INCOME
------------- ------------ ------------- ------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends. . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 104,337 $ 49,394 $ 266,364 $ 283,872
------------- ------------ ------------- ------------
EXPENSES (NOTE 4):
Mortality and expense risk fees. . . . . . . . . . . . . . . . . 67,425 68,115 107,096 56,742
Administrative expense charges . . . . . . . . . . . . . . . . . 8,333 8,418 13,237 7,013
------------- ------------ ------------- ------------
Total expenses . . . . . . . . . . . . . . . . . . . . . . . 75,758 76,533 120,333 63,755
------------- ------------ ------------- ------------
Net investment income (loss) . . . . . . . . . . . . . . . . 28,579 (27,139) 146,031 220,117
------------- ------------ ------------- ------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Realized gain distributions from portfolio sponsors. . . . . . . - - - -
Net realized gain (loss) from sales of investments . . . . . . . 56,360 75,204 131,927 6,785
------------- ------------ ------------- ------------
Net realized gain (loss) from gain distributions and
sales of investments. . . . . . . . . . . . . . . . . . . 56,360 75,204 131,927 6,785
Net unrealized gain. . . . . . . . . . . . . . . . . . . . . . . 2,098,510 1,792,802 1,824,466 94,565
------------- ------------ ------------- ------------
Net realized and unrealized gain (loss) on investments. . . 2,154,870 1,868,006 1,956,393 101,350
------------- ------------ ------------- ------------
Net increase (decrease) in net assets from operations . . . $ 2,183,449 $ 1,840,867 $ 2,102,424 $ 321,467
------------- ------------ ------------- ------------
------------- ------------ ------------- ------------
<CAPTION>
SELECT SELECT
MONEY INTERNATIONAL CAPITAL FIDELITY VIP
MARKET EQUITY APPRECIATION HIGH INCOME
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends. . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 294,889 $ 46,860 $ - $ 140,694
------------- ------------ ------------- -------------
EXPENSES (NOTE 4):
Mortality and expense risk fees. . . . . . . . . . . . . . . . . 69,025 52,505 21,840 23,276
Administrative expense charges . . . . . . . . . . . . . . . . . 8,531 6,489 2,699 2,877
------------- ------------ ------------- ------------
Total expenses . . . . . . . . . . . . . . . . . . . . . . . 77,556 58,994 24,539 26,153
------------- ------------ ------------- ------------
Net investment income (loss) . . . . . . . . . . . . . . . . 217,333 (12,134) (24,539) 114,541
------------- ------------ ------------- ------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Realized gain distributions from portfolio sponsors. . . . . . . - - - -
Net realized gain (loss) from sales of investments . . . . . . . - 63,088 (9,216) 5,228
------------- ------------ ------------- ------------
Net realized gain (loss) from gain distributions
and sales of investments . . . . . . . . . . . . . . . . . - 63,088 (9,216) 5,228
Net unrealized gain. . . . . . . . . . . . . . . . . . . . . . . - 398,928 331,321 282,164
------------- ------------ ------------- ------------
Net realized and unrealized gain (loss) on investments. . . - 462,016 322,105 287,392
------------- ------------ ------------- ------------
Net increase (decrease) in net assets from operations . . . $ 217,333 $ 449,882 $ 297,566 $ 401,933
------------- ------------ ------------- ------------
------------- ------------ ------------- ------------
<CAPTION>
T. ROWE PRICE
FIDELITY VIP FIDELITY VIP INTERNATIONAL
EQUITY-INCOME GROWTH STOCK
------------- ------------- -------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividends. . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 266,279 $ 71,851 $ -
------------- ------------ -------------
EXPENSES (NOTE 4):
Mortality and expense risk fees. . . . . . . . . . . . . . . . . 33,602 22,453 16,171
Administrative expense charges . . . . . . . . . . . . . . . . . 4,153 2,776 1,998
------------- ------------ -------------
Total expenses . . . . . . . . . . . . . . . . . . . . . . . . 37,755 25,229 18,169
------------- ------------ -------------
Net investment income (loss) . . . . . . . . . . . . . . . . . 228,524 46,622 (18,169)
------------- ------------ -------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Realized gain distributions from portfolio sponsors. . . . . . . - - -
Net realized gain (loss) from sales of investments . . . . . . . 11,142 11,952 25,710
------------- ------------ -------------
Net realized gain (loss) from gain distributions
and sales of investments. . . . . . . . . . . . . . . . . . . 11,142 11,952 25,710
Net unrealized gain. . . . . . . . . . . . . . . . . . . . . . . 566,082 475,119 160,304
------------- ------------ -------------
Net realized and unrealized gain (loss) on investments. . . . 577,224 487,071 186,014
------------- ------------ -------------
Net increase (decrease) in net assets from operations . . . . $ 805,748 $ 533,693 $ 167,845
------------- ------------ -------------
------------- ------------ -------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
ALLMERICA SELECT SEPARATE ACCOUNT
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SELECT
AGGRESSIVE GROWTH SELECT GROWTH
NINE NINE
MONTHS ENDED MONTHS ENDED
9/30/97 YEAR ENDED 9/30/97 YEAR ENDED
(UNAUDITED) 12/31/96 (UNAUDITED) 12/31/96
-------------- ------------- ------------- --------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss) . . . . . . . . . . . . . . . . . $ 28,579 $ (63,849) $ (27,139) $ (39,323)
Net realized gain (loss) on investments. . . . . . . . . . . . 56,360 444,243 75,204 793,502
Net unrealized gain (loss) on investments. . . . . . . . . . . 2,098,510 258,540 1,792,802 (50,436)
------------- ------------ ------------- -------------
Net increase in net assets from operations . . . . . . . . . . 2,183,449 638,934 1,840,867 703,743
------------- ------------ ------------- -------------
FROM CAPITAL TRANSACTIONS (NOTE 5):
Net purchase payments. . . . . . . . . . . . . . . . . . . . . 775,736 227,822 790,900 258,737
Withdrawals. . . . . . . . . . . . . . . . . . . . . . . . . . (235,586) (87,887) (223,618) (79,238)
Annuity benefits . . . . . . . . . . . . . . . . . . . . . . . (178,269) - (131,609) -
Other transfers from (to) the General Account of
First Allmerica Financial Life Insurance
Company (Sponsor) . . . . . . . . . . . . . . . . . . . . . 1,403,813 2,221,463 2,003,625 1,750,035
Net increase (decrease) in investment by First Allmerica
Financial Life Insurance Company (Sponsor). . . . . . . . . - - - -
------------- ------------ ------------- -------------
Net increase (decrease) in net assets from capital
transactions . . . . . . . . . . . . . . . . . . . . . . . . 1,765,694 2,361,398 2,439,298 1,929,534
------------- ------------ ------------- -------------
Net increase (decrease) in net assets. . . . . . . . . . . . . 3,949,143 3,000,332 4,280,165 2,633,277
NET ASSETS:
Beginning of year. . . . . . . . . . . . . . . . . . . . . . . . 6,124,111 3,123,779 5,396,692 2,762,415
------------- ------------ ------------- -------------
End of year. . . . . . . . . . . . . . . . . . . . . . . . . . . $ 10,073,254 $ 6,124,111 $ 9,675,857 $ 5,395,692
------------- ------------ ------------- -------------
------------- ------------ ------------- -------------
<CAPTION>
SELECT GROWTH AND INCOME SELECT INCOME
NINE NINE
MONTHS ENDED MONTHS ENDED
9/30/97 YEAR ENDED 9/30/97 YEAR ENDED
(UNAUDITED) 12/31/96 (UNAUDITED) 12/31/96
-------------- ------------- ------------- --------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss) . . . . . . . . . . . . . . . . . $ 146,031 $ 3,734 $ 220,117 $ 248,869
Net realized gain (loss) on investments. . . . . . . . . . . . 131,927 871,086 6,785 3,383
Net unrealized gain (loss) on investments. . . . . . . . . . . 1,824,466 525,985 94,565 (137,363)
------------- ------------ ------------- -------------
Net increase in net assets from operations . . . . . . . . . . 2,102,424 1,200,805 321,467 114,889
------------- ------------ ------------- -------------
FROM CAPITAL TRANSACTIONS (NOTE 5):
Net purchase payments. . . . . . . . . . . . . . . . . . . . . 1,059,598 369,437 440,702 267,963
Withdrawals. . . . . . . . . . . . . . . . . . . . . . . . . . (287,170) (122,535) (142,305) (139,802)
Annuity benefits . . . . . . . . . . . . . . . . . . . . . . . (202,601) - (8,792) -
Other transfers from (to) the General Account of
First Allmerica Financial Life Insurance
Company (Sponsor) . . . . . . . . . . . . . . . . . . . . . 2,630,621 2,666,288 473,190 828,538
Net increase (decrease) in investment by First Allmerica
Financial Life Insurance Company (Sponsor). . . . . . . . . (1,547) - (219) -
------------- ------------ ------------- -------------
Net increase (decrease) in net assets from capital transactions 3,198,900 2,913,190 762,576 956,699
------------- ------------ ------------- -------------
Net increase (decrease) in net assets. . . . . . . . . . . . . 5,301,324 4,113,995 1,084,043 1,071,588
NET ASSETS:
Beginning of year. . . . . . . . . . . . . . . . . . . . . . . . 8,976,552 4,864,557 5,788,428 4,716,840
------------- ------------ ------------- -------------
End of year. . . . . . . . . . . . . . . . . . . . . . . . . . . $ 14,279,876 $ 8,978,552 $ 6,872,471 $ 5,788,428
------------- ------------ ------------- -------------
------------- ------------ ------------- -------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
ALLMERICA SELECT SEPARATE ACCOUNT
STATEMENTS OF CHANGES IN NET ASSETS (Continued)
<TABLE>
<CAPTION>
SELECT
MONEY MARKET INTERNATIONAL EQUITY
NINE NINE
MONTHS ENDED MONTHS ENDED
9/30/97 YEAR ENDED 9/30/97 YEAR ENDED
(UNAUDITED) 12/31/96 (UNAUDITED) 12/31/96
-------------- ------------- ------------- --------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss) . . . . . . . . . . . . . . . . . $ 217,333 $ 206,606 $ (12,134) $ 42,325
Net realized gain (loss) on investments. . . . . . . . . . . . - - 63,088 27,379
Net unrealized gain (loss) on investments. . . . . . . . . . . - - 398,928 580,307
------------- ------------ ------------- -------------
Net increase in net assets from operations . . . . . . . . . . 217,333 206,606 449,882 650,011
------------- ------------ ------------- -------------
FROM CAPITAL TRANSACTIONS (NOTE 5):
Net purchase payments. . . . . . . . . . . . . . . . . . . . . 12,245,854 18,102,537 757,600 228,557
Withdrawals. . . . . . . . . . . . . . . . . . . . . . . . . . (409,719) (536,885) (157,694) (68,186)
Annuity benefits.. . . . . . . . . . . . . . . . . . . . . . . - - (26,708) -
Other transfers from (to) the General Account of
First Allmerica Financial Life Insurance
Company (Sponsor) . . . . . . . . . . . . . . . . . . . . . (12,265,521) (15,356,737) 1,319,699 1,770,211
Net increase (decrease) in investment by First Allmerica
Financial Life Insurance Company (Sponsor). . . . . . . . . (189) - - (131)
------------- ------------ ------------- -------------
Net increase (decrease) in net assets from capital transactions (429,575) 2,208,915 1,892,897 1,930,451
------------- ------------ ------------- -------------
Net increase (decrease) in net assets. . . . . . . . . . . . . (212,242) 2,415,521 2,342,779 2,580,462
NET ASSETS:
Beginning of year. . . . . . . . . . . . . . . . . . . . . . . . 6,705,530 4,290,009 4,722,246 2,141,784
------------- ------------ ------------- -------------
End of year. . . . . . . . . . . . . . . . . . . . . . . . . . . $ 6,493,288 $ 6,705,530 $ 7,065,025 $ 4,722,246
------------- ------------ ------------- -------------
------------- ------------ ------------- -------------
<CAPTION>
SELECT
CAPITAL APPRECIATION FIDELITY VIP HIGH INCOME
NINE NINE
MONTHS ENDED MONTHS ENDED
9/30/97 YEAR ENDED 9/30/97 YEAR ENDED
(UNAUDITED) 12/31/96 (UNAUDITED) 12/31/96
-------------- ------------- ------------- --------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS :
FROM OPERATIONS:
Net investment income (loss) . . . . . . . . . . . . . . . . . $ (24,539) $ (16,888) $ 114,541 $ 15,424
Net realized gain (loss) on investments. . . . . . . . . . . . (9,216) 4,825 5,228 5,967
Net unrealized gain (loss) on investments. . . . . . . . . . . 331,321 22,279 282,164 77,404
------------- ------------ ------------- -------------
Net increase in net assets from operations . . . . . . . . . . 297,566 10,216 401,933 98,795
------------- ------------ ------------- -------------
FROM CAPITAL TRANSACTIONS (NOTE 5):
Net purchase payments. . . . . . . . . . . . . . . . . . . . . 292,303 129,008 341,250 106,501
Withdrawals. . . . . . . . . . . . . . . . . . . . . . . . . . (153,019) (15,630) (156,868) (24,484)
Annuity benefits . . . . . . . . . . . . . . . . . . . . . . . (3,860) (1.247) (3,226) -
Other transfers from (to) the General Account of
First Allmerica Financial Life Insurance
Company (Sponsor) . . . . . . . . . . . . . . . . . . . . . 675,720 1,362,872 1,294,761 1,119,571
Net increase (decrease) in investment by First Allmerica
Financial Life Insurance Company (Sponsor). . . . . . . . . - (293) - (244)
------------- ------------ ------------- -------------
Net increase (decrease) in net assets from capital transactions 811,144 1,474,710 1,475,917 1,201,344
------------- ------------ ------------- -------------
Net increase (decrease) in net assets. . . . . . . . . . . . . 1,108,710 1,484,926 1,877,850 1,300,139
NET ASSETS:
Beginning of year. . . . . . . . . . . . . . . . . . . . . . . . 2,026,278 541,352 1,599,567 299,428
------------- ------------ ------------- -------------
End of year. . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,134,988 $ 2,026,278 $ 3,477,417 $ 1,599,567
------------- ------------ ------------- -------------
------------- ------------ ------------- -------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
ALLMERICA SELECT SEPARATE ACCOUNT
STATEMENTS OF CHANGES IN NET ASSETS (Continued)
<TABLE>
<CAPTION>
FIDELITY VIP EQUITY-INCOME FIDELITY VIP GROWTH
NINE NINE
MONTHS ENDED MONTHS ENDED
9/30/97 YEAR ENDED 9/30/97 YEAR ENDED
(UNAUDITED) 12/31/96 (UNAUDITED) 12/31/96
-------------- ------------- ------------- --------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss) . . . . . . . . . . . . . . . . . $ 228,524 $ (16,999) $ 46,622 $ (11,820)
Net realized gain (loss) on investments. . . . . . . . . . . . 11,142 35,856 11,952 24,929
Net unrealized gain (loss) on investments. . . . . . . . . . . 566,082 154,372 475,119 71,984
------------- ------------ ------------- -------------
Net increase in net assets from operations . . . . . . . . . . 805,748 173,229 533,693 85,093
------------- ------------ ------------- -------------
FROM CAPITAL TRANSACTIONS (NOTE 5):
Net purchase payments. . . . . . . . . . . . . . . . . . . . . 552,583 137,607 365,356 104,528
Withdrawals. . . . . . . . . . . . . . . . . . . . . . . . . . (172,928) (42,383) (131,307) (17,551)
Annuity benefits . . . . . . . . . . . . . . . . . . . . . . . - (1,360) - (1,375)
Other transfers from (to) the General Account of
First Allmerica Financial Life Insurance
Company (Sponsor) . . . . . . . . . . . . . . . . . . . . . 1,512,797 1,639,683 696,179 1,358,790
Net increase (decrease) in investment by First Allmerica
Financial Life Insurance Company (Sponsor). . . . . . . . . - (266) - (279)
------------- ------------ ------------- -------------
Net increase (decrease) in net assets from capital transactions 1,892,452 1,733,481 930,228 1,444,113
------------- ------------ ------------- -------------
Net increase (decrease) in net assets. . . . . . . . . . . . . 2,698,200 1,906,710 1,463,921 1,529,206
NET ASSETS:
Beginning of year. . . . . . . . . . . . . . . . . . . . . . . . 2,418,229 551,519 1,852,619 323,413
------------- ------------ ------------- -------------
End of year. . . . . . . . . . . . . . . . . . . . . . . . . . . $ 5,116,429 $ 2,418,229 $ 3,316,540 $ 1,852,619
------------- ------------ ------------- -------------
------------- ------------ ------------- -------------
</TABLE>
<TABLE>
<CAPTION>
T. ROWE PRICE
INTERNATIONAL STOCK
NINE
MONTHS ENDED
9/30/97 YEAR ENDED
(UNAUDITED) 12/31/96
-------------- -------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss) . . . . . . . . . . . . . . . . . $ (18,169) $ 2,054
Net realized gain (loss) on investments. . . . . . . . . . . . 25,710 12,416
Net unrealized gain (loss) on investments. . . . . . . . . . . 160,304 76,953
------------- ------------
Net increase in net assets from operations.. . . . . . . . . . 167,845 91,423
------------- ------------
FROM CAPITAL TRANSACTIONS (NOTE 5):
Net purchase payments. . . . . . . . . . . . . . . . . . . . . 206,867 104,085
Withdrawals. . . . . . . . . . . . . . . . . . . . . . . . . . (129,910) (7,992)
Annuity benefits . . . . . . . . . . . . . . . . . . . . . . . (67,027) (1,307)
Other transfers from (to) the General Account of
First Allmerica Financial Life Insurance
Company (Sponsor) . . . . . . . . . . . . . . . . . . . . . 534,482 939,704
Net increase (decrease) in investment by First Allmerica
Financial Life Insurance Company (Sponsor). . . . . . . . . - (234)
------------- ------------
Net increase (decrease) in net assets from capital transactions 544,412 1,034,256
------------- ------------
Net increase (decrease) in net assets. . . . . . . . . . . . 712,257 1,125,679
NET ASSETS:
Beginning of year. . . . . . . . . . . . . . . . . . . . . . . . 1,407,902 282,223
------------- ------------
End of year. . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,120,159 $ 1,407,902
------------- ------------
------------- ------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
ALLMERICA SELECT SEPARATE ACCOUNT
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1997
NOTE 1 - ORGANIZATION
Allmerica Select Separate Account (Allmerica Select) is a separate
investment account of First Allmerica Financial Life Insurance Company (the
Company), established on April 1, 1994 for the purpose of separating from the
general assets of the Company those assets used to fund certain variable
annuity contracts issued by the Company. The Company is a wholly-owned
subsidiary of Allmerica Financial Corporation (AFC). Under applicable
insurance law, the assets and liabilities of Allmerica Select are clearly
identified and distinguished from the other assets and liabilities of the
Company. Allmerica Select cannot be charged with liabilities arising out of
any other business of the Company.
Allmerica Select is registered as a unit investment trust under the
Investment Company Act of 1940, as amended (the 1940 Act). Allmerica Select
currently offers eleven Sub-Accounts. Each Sub-Account invests exclusively in
a corresponding investment portfolio of Allmerica Investment Trust (the
Trust) managed by Allmerica Investment Management Company, Inc., a
wholly-owned subsidiary of the Company; the Variable Insurance Products Fund
(Fidelity VIP) managed by Fidelity Management and Research Company (FMR), or
T. Rowe Price International Series, Inc. (T. Rowe Price) managed by Rowe
Price-Fleming International, Inc. The Trust, Fidelity VIP, and T. Rowe Price
(the Funds) are open-end, diversified, management investment companies
registered under the 1940 Act.
Allmerica Select funds two types of variable annuity contracts,
"qualified" contracts and "non-qualified" contracts. A qualified contract is
one that is purchased in connection with a retirement plan which meets the
requirements of Section 401, 403, or 408 of the Internal Revenue Code (the
Code) while a non-qualified contract is one that is not purchased in
connection with one of the indicated retirement plans. The tax treatment for
certain withdrawals or surrenders will vary according to whether they are
made from a qualified contract or a non-qualified contract.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
INVESTMENTS - Security transactions are recorded on the trade date.
Investments held by the Sub-Accounts are stated at the net asset value per
share of the respective investment portfolio of the Trust, Fidelity VIP, and
T. Rowe Price. Net realized gains and losses on securities sold are
determined on the average cost method. Dividends and capital gain
distributions are recorded on the ex-dividend date and are reinvested in
additional shares of the respective investment portfolio of the Trust,
Fidelity VIP, and T. Rowe Price at net asset value.
FEDERAL INCOME TAXES - The Company is taxed as a "life insurance
company" under Subchapter L of the Code and files a consolidated federal
income tax return. The Company anticipates no tax liability resulting from
the operations of Allmerica Select. Therefore, no provision for income taxes
has been charged against Allmerica Select.
ANNUITANT MORTALITY FLUCTUATION RESERVE - A strengthening reserve is
required for doing business in the state of New York. The purpose of the
reserve is to provide for future mortality experience which is less favorable
than that assumed in pricing the annuity. This reserve is funded by the
Company.
<PAGE>
PART C. OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
(a) FINANCIAL STATEMENTS
Financial Statements Included in Part A
None
Financial Statements Included in Part B
Financial Statements for First Allmerica Financial Life
Insurance Company and for Allmerica Select Separate Account
of First Allmerica Financial Life Insurance Company were
previously filed on April 30, 1997 in Post-effective
Amendment No. 7 and are incorporated by reference herein.
Unaudited Financial Statements for the period ended 9/30/97
for First Allmerica Financial Life Insurance Company and for
Allmerica Select Separate Account of First Allmerica
Financial Life Insurance Company are filed herewith.
Financial Statements Included in Part C
None
(b) EXHIBITS
EXHIBIT 1 Vote of Board of Directors Authorizing Establishment of
Registrant dated August 20, 1991 was previously filed on May
11, 1992 in Registrant's Initial Registration Statement and is
incorporated herein by reference.
EXHIBIT 2 Not Applicable. Pursuant to Rule 26a-2, the Insurance Company
may hold the assets of the Registrant not pursuant to a
trust indenture or other such instrument.
EXHIBIT 3 Form of Underwriting and Administrative Services Agreement was
previously filed on November 1, 1993 in Registrant's
Initial Registration Statement and is herein incorporated
by reference. Broker's Agreement was previously filed on
August 14, 1992 in Registration Statement No. 33-47216 and is
incorporated herein by reference.
EXHIBIT 4 Specimen Generic Policy Form A3020-94 GRC was previously filed
on November 1, 1993, in Registrant's Initial Registration
Statement and is incorporated herein by reference. Specimen
Policy Form B was previously filed on May 7, 1996 in
Post-Effective Amendment No. 5 and is incorporated by
reference herein.
EXHIBIT 5 Specimen Generic Application Form was previously filed
on November 1, 1993, in Registrant's Initial Registration
Statement and is herein incorporated by reference. Specimen
Application Form B is was previously filed on May 7, 1996 in
Post-Effective Amendment No. 5 and is incorporated by
reference herein.
EXHIBIT 6 The Depositor's Articles of Incorporation were previously
filed on April 30, 1996 in Post-Effective Amendment No. 4,
which was effective on October 16, 1995 and is incorporated
herein by reference. Revised Bylaws were filed on April 30,
1996 in Post-Effective Amendment No. 4 and are incorporated
herein by reference.
EXHIBIT 7 Not Applicable.
<PAGE>
EXHIBIT 8 (a) AUV Calculation Services Agreement with The Shareholder
Services Group dated March 31, 1995 was previously
filed on April 12, 1995 in Post-Effective Amendment No.
2 and is incorporated by reference herein.
(b) Fidelity Services Agreement was filed on April 30, 1996
in Post-Effective Amendment No. 4 and is incorporated
herein by reference.
(c) An Amendment to the Fidelity Service Agreement
effective as of January 1, 1997 was previously filed on
April 30, 1997 in Post-Effective Amendment No. 7 and is
incorporated by reference herein.
(d) A proposed form of the Fidelity Service Contract was
previously filed on April 30, 1997 in Post-Effective
Amendment No. 7 and is incorporated by reference
herein.
(e) A proposed form of the T. Rowe Price Agreement was
previously filed on April 30, 1997 in Post-Effective
Amendment No. 7 and is incorporated by reference
herein.
EXHIBIT 9 Consent and Opinion of Counsel is filed herewith.
EXHIBIT 10 Consent of Independent Accountants is filed herewith.
EXHIBIT 11 None.
EXHIBIT 12 None.
EXHIBIT 13 Not applicable.
EXHIBIT 14 Not Applicable.
EXHIBIT 15 Form of Participation Agreement between the Company (formerly
known as SMA Life) and Allmerica Investment Trust was
previously filed on April 1, 1991 in Registration Statement
No. 33-39702 and is incorporated by reference herein. Form of
Participation Agreement between the Company and Fidelity VIP,
and an Amendment thereto, was previously filed in Post-
effective Amendment No. 6 , Registration No. 33-47216 on April
25, 1995 and are incorporated by reference herein. Form of
Participation Agreement between the Company and T. Rowe Price
International Series, Inc. was previously filed in Post-
effective Amendment No. 2 on April 13, 1995 and is incorporated
by reference herein.
DIRECTORS AND PRINCIPAL OFFICERS OF THE COMPANY
<TABLE>
<CAPTION>
NAME AND POSITION PRINCIPAL OCCUPATION(S) DURING
WITH COMPANY PAST FIVE YEARS
------------ ---------------
<S> <C>
Bruce C. Anderson Director of First Allmerica since 1996; Vice
Director and Vice President President, First Allmerica since 1984
Abigail M. Armstrong Secretary of First Allmerica since 1996; Counsel,
Secretary and Counsel First Allmerica since 1991
Robert E. Bruce Director and Chief Information Officer of First
Director, Vice President and Allmerica since 1997; Vice President of First
Chief Information Officer Allmerica since 1995; Corporate Manager, Digital
Equipment Corporation 1979 to 1995
John P. Kavanaugh Director and Chief Investment Officer of First
Director, Vice President and Allmerica since 1996; Vice President,
Chief Investment Officer First Allmerica since 1991
<PAGE>
<CAPTION>
<S> <C>
John F. Kelly Director of First Allmerica since 1996; Senior Vice
Director, Senior Vice President, President, General Counsel and Assistant Secretary,
General Counsel and Assistant First Allmerica since 1991
Secretary
J. Barry May Director of First Allmerica since 1996; Director and
Director President, The Hanover Insurance Company since
1996; Vice President, The Hanover Insurance
Company, 1993 to 1996; General Manager, The
Hanover Insurance Company 1989 to 1993
James R. McAuliffe Director of First Allmerica since 1996; President
Director and CEO, Citizens Insurance Company of America
since 1994; Vice President, First Allmerica 1982 to
1994 and Chief Investment Officer, First Allmerica
1986 to 1994
John F. O'Brien Director, Chairman of the Board, President and
Director, Chairman of the Board, Chief Executive Officer, First Allmerica since 1989
President and Chief Executive Officer
Edward J. Parry, III Director and Chief Financial Officer of First
Director, Vice President, Allmerica since 1996; Vice President and
Chief Financial Officer and Treasurer Treasurer, First Allmerica since 1993; Assistant
Vice President, 1992 to 1993
Richard M. Reilly Director of First Allmerica since 1996; Vice
Director and Vice President President, First Allmerica since 1990; Director,
Allmerica Investments, Inc. since 1990; Director
and President, Allmerica Investment Management
Company, Inc. since 1990
Eric A. Simonsen Director of First Allmerica since 1996; Vice
Director and Vice President President, First Allmerica since 1990; Chief
Financial Officer, First Allmerica 1990 to 1996
Phillip E. Soule Director of First Allmerica since 1996; Vice
Director and Vice President President, First Allmerica since 1987
</TABLE>
ITEM 26. PERSONS UNDER COMMON CONTROL WITH REGISTRANT
See attached organizational chart.
FIRST ALLMERICA FINANCIAL LIFE INSURANCE COMPANY
<TABLE>
<CAPTION>
NAME ADDRESS TYPE OF BUSINESS
---- ------- ----------------
<S> <C> <C>
AAM Equity Fund 440 Lincoln Street Massachusetts Grantor Trust
Worcester MA 01653
AAM Growth & Income Fund, LLC 440 Lincoln Street Limited Liability Corporation
Worcester MA 01653
AAM High Yield Fund, LLC 440 Lincoln Street Limited Liability Corporation
Worcester MA 01653
AFC Capital Trust I 440 Lincoln Street Statutory Business Trust
Worcester MA 01653
Allmerica Asset Management Limited 440 Lincoln Street Investment advisory services
Worcester MA 01653
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Allmerica Asset Management, Inc. 440 Lincoln Street Investment advisory services
Worcester MA 01653
Allmerica Benefits, Inc. 440 Lincoln Street Non-insurance medical services
Worcester MA 01653
Allmerica Equity Index Pool 440 Lincoln Street Massachusetts Grantor Trust
Worcester MA 01653
Allmerica Financial Alliance Insurance Company 100 North Parkway Multi-line property and casualty
Worcester MA 01605 insurance
Allmerica Financial Benefit Insurance Company 100 North Parkway Multi-line property and casualty
Worcester MA 01605 insurance
Allmerica Financial Corporation 440 Lincoln Street Holding Company
Worcester MA 01653
Allmerica Financial Insurance Brokers, Inc. 440 Lincoln Street Insurance Broker
Worcester MA 01653
Allmerica Financial Life Insurance and Annuity 440 Lincoln Street Life insurance, accident and
Company (formerly known as SMA Life Assurance Worcester MA 01653 health insurance, annuities,
Company) variable annuities and variable life
insurance
Allmerica Financial Services Insurance Agency, 440 Lincoln Street Insurance Agency
Inc. Worcester MA 01653
Allmerica Funding Corp. 440 Lincoln Street Special purpose funding vehicle
Worcester MA 01653 for commercial paper
Allmerica Funds 440 Lincoln Street Investment Company
Worcester MA 01653
Allmerica, Inc. 440 Lincoln Street Common employer for Allmerica
Worcester MA 01653 Financial Corporation entities
Allmerica Institutional Services, Inc. 440 Lincoln Street Accounting, marketing and
(formerly known as 440 Financial Group of Worcester MA 01653 shareholder services for
Worcester, Inc.) investment companies
Allmerica Investment Management Company, Inc. 440 Lincoln Street Investment advisory services
Worcester MA 01653
Allmerica Investments, Inc. 440 Lincoln Street Securities, retail broker-dealer
Worcester MA 01653
Allmerica Investment Trust 440 Lincoln Street Investment Company
Worcester MA 01653
Allmerica Plus Insurance Agency, Inc. 440 Lincoln Street Insurance Agency
Worcester MA 01653
Allmerica Property & Casualty Companies, Inc. 440 Lincoln Street Holding Company
Worcester MA 01653
Allmerica Securities Trust 440 Lincoln Street Investment Company
Worcester MA 01653
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Allmerica Services Corporation 440 Lincoln Street Internal administrative services
Worcester MA 01653 provider to Allmerica Financial
Corporation entities
Allmerica Trust Company, N.A. 440 Lincoln Street Limited purpose national trust
Worcester MA 01653 company
AMGRO, Inc. 100 North Parkway Premium financing
Worcester MA 01605
APC Funding Corp. 440 Lincoln Street Special purpose funding vehicle for
Worcester MA 01653 commercial paper
Citizens Corporation 440 Lincoln Street Holding Company
Worcester MA 01653
Citizens Insurance Company of America 645 West Grand River Multi-line property and casualty
Howell MI 48843 insurance
Citizens Insurance Company of Illinois 333 Pierce Road Multi-line property and casualty
Itasca IL 60143 insurance
Citizens Insurance Company of the Midwest 3950 Priority Way Multi-line property and casualty
South Drive, Suite 200 insurance
Indianapolis IN 46280
Citizens Insurance Company of Ohio 8101 N. High Street Multi-line property and casualty
P.O. Box 342250 insurance
Columbus OH 43234
Citizens Management, Inc. 645 West Grand River Services management company
Howell MI 48843
First Allmerica Financial Life Insurance 440 Lincoln Street Life, pension, annuity, accident and
Company (formerly State Mutual Life Worcester MA 01653 health insurance company
Assurance Company of America)
Greendale Special Placements Fund 440 Lincoln Street Massachusetts Grantor Trust
Worcester MA 01653
The Hanover American Insurance Company 100 North Parkway Multi-line property and casualty
Worcester MA 01605 insurance
The Hanover Insurance Company 100 North Parkway Multi-line property and casualty
Worcester MA 01605 insurance
Hanover Texas Insurance Management 801 East Campbell Road Attorney-in-fact for Hanover
Company, Inc. Richardson TX 75081 Lloyd's Insurance Company
Hanover Lloyd's Insurance Company 801 East Campbell Road Multi-line property and casualty
Richardson TX 75081 insurance
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Llods Credit Corporation 440 Lincoln Street Premium financing service franchises
Worcester MA 01653
Logan Wells Water Company, Inc. 603 Heron Drive Water Company serving land development
Bridgeport NJ 08014 investment
Massachusetts Bay Insurance Company 100 North Parkway Multi-line property and casualty insurance
Worcester MA 01605
SMA Financial Corp. 440 Lincoln Street Holding Company
Worcester MA 01653
Somerset Square, Inc. 440 Lincoln Street Real estate holding company
Worcester MA 01653
Sterling Risk Management Services, Inc. 440 Lincoln Street Risk management services
Worcester MA 01653
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S><C>
Allmerica Financial Corporation
Delaware
| | | | |
___________________________________________________________________________________
100% 100% 100% 100% 100%
Allmerica, Inc. Allmerica First Allmerica AFC Capital Allmerica
Funding Corp. Financial Life Trust I Services
Insurance Corporation
Company
Massachusetts Massachusetts Massachusetts Delaware Massachusetts
|
_______________________________________________
|
100%
Logan Wells
Water Company,
Inc.
New Jersey
______________________________________________________________________________________________________________________
| | | | | |
65.78% 100% 99.2% 100% 100% 100%
Allmerica Sterling Risk Allmerica Allmerica Allmerica Allmerica
Property Management Trust Investments, Institutional Financial Life
& Casualty Services, Inc. Company, N.A. Inc. Services, Inc. Insurance and
Companies, Inc. Annuity Company
Federally
Delaware Delaware Chartered Massachusetts Massachusetts Delaware
|
___________________________________________________________________________ ______|_______
| | | | |
100% 100% 100% 100% 100%
APC The Hanover Allmerica Citizens Somerset
Funding Corp. Insurance Financial Insurance Square, Inc.
Company Insurance Company of
Brokers, Inc. Illinois
Massachusetts New Hampshire Massachusetts Illinois Massachusetts
|
______________________________________________________________________________________________________________________
| | | | |
100% 100% 100% 82.5% 100%
Allmerica The Hanover Hanover Texas Citizens Massachusetts
Financial American Insurance Corporation Bay Insurance
Benefit Insurance Management Company
Insurance Company Company, Inc.
Company
Pennsylvania New Hampshire Texas Delaware New Hampshire
|
________________________________________________________
| | |
100% 100% 100%
Citizens Citizens Insurance Citizens
Insurance Company of Insurance
Company of Ohio America Company of the
Midwest
Ohio Michigan Indiana
|
_______________
100%
Citizens
Management Inc.
Michigan
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S><C>
Allmerica Financial Corporation
Delaware
| | | | |
___________________________________________________________________________________
100% 100% 100% 100% 100%
Allmerica, Inc. Allmerica First Allmerica AFC Capital Allmerica
Funding Corp. Financial Life Trust I Services
Insurance Corporation
Company
Massachusetts Massachusetts Massachusetts Delaware Massachusetts
|
_______________________________________________
|
100%
SMA
Financial Corp.
Massachusetts
|
_____________________________________________________________________________________________________________________
| | | | |
100% 100% 100% 100% 100%
Allmerica Allmerica Allmerica Allmerica Allmerica
Investment Asset Financial Services Asset Benefits
Management Management, Insurance Management, Inc.
Company, Inc. Inc. Agency, Inc. Limited
Massachusetts Massachusetts Massachusetts Bermuda Florida
________________ _________________________________
Allmerica Equity Greendale AAM
Index Pool Special Equity Fund
Placements
Fund
Massachusetts Massachusetts Massachusetts
_____________________________________
| | Grantor Trusts established for the benefit of First
100% 100% Allmerica, Allmerica Financial Life, Hanover and
Allmerica AMGRO, Inc. Citizens
Financial Allmerica Allmerica Allmerica
Alliance Investment Trust Funds Securities
Insurance Trust
Company
Massachusetts Massachusetts Massachusetts
New Hampshire Massachusetts
|
|
100% Affiliated Management Investment Companies
Lloyd's
Credit Hanover Lloyd's
Corporation Insurance
Company
Massachusetts Texas
Affiliated Lloyd's plan company, controlled by
Underwriters for the benefit of the Hanover
Insurance Company
AAM AAM
Growth High
Income Fund Yield Fund,
L.L.C. L.L.C.
Delaware Massachusettes
LLC established for the benefit of
First Allmerica, Allmerica
Financial Life, Hanover and
Citizens
</TABLE>
<PAGE>
ITEM 27. NUMBER OF CONTRACT OWNERS
As of December 31, 1997 there were 668 Contract holders of qualified
Contracts and 978 Contract holders of non-qualified contracts.
ITEM 28. INDEMNIFICATION
To the fullest extent permissible under Massachusetts General Laws, no
director shall be personally liable to the Company or any policyholder for
monetary damages for any breach of fiduciary duty as a director,
notwithstanding any provision of law to the contrary; provided, however,
that this provision shall not eliminate or limit the liability of a
director:
1. for any breach of the director's duty of loyalty to the Company
or its policyholders;
2. for acts or omissions not in good faith, or which involve
intentional misconduct or a knowing violation of law;
3. for liability, if any, imposed on directors of mutual insurance
companies pursuant to M.G.L.A. c. 156B Section 61 or M.G.L.A. c.156B
Section 62;
4. for any transactions from which the director derived an improper
personal benefit.
ITEM 29. PRINCIPAL UNDERWRITERS
(a) Allmerica Investments, Inc. also acts as principal underwriter
for the following:
* VEL Account, VEL II Account, Inheiritage Account, Separate
Accounts VA-A, VA-B, VA-C, VA-G, VA-H, VA-K, VA-P, Allmerica
Select Separate Account, Group VEL Account, Allmerica Select
Separate Account II, Separate Account KG, KGC, Separate Account
Fulcrum, and Fulcrum Variable Life Separate Account of Allmerica
Financial Life Insurance and Annuity Company
* VEL II Account, Inheiritage Account, Separate Account I,
Allmerica Select, Separate Account VA-K, VA-P, Separate Account KG,
Separate Account KGC, Separate Account Fulcrum of First Allmerica
Financial Life Insurance Company
* Allmerica Investment Trust
<PAGE>
(b) The Principal Business Address of each of the following Directors and
Officers of Allmerica Investments, Inc. is:
440 Lincoln Street
Worcester, Massachusetts 01653
NAME POSITION OR OFFICE WITH UNDERWRITER
---- -----------------------------------
Emil J. Aberizk Vice President
Abigail M. Armstrong Secretary and Counsel
Richard F. Betzler, Jr. Vice President
Edward T. Berger Vice President and Chief Compliance Officer
Philip J. Coffey Vice President
Thomas P. Cunningham Vice President, Chief Financial Officer and
John F. Kelly Director
William F. Monroe, Jr. Vice President
David J. Mueller Vice President
John F. O'Brien Director
Stephen Parker Director, President and Chief Executive
Officer
Edward J. Parry, III Treasurer
Richard M. Reilly Director
Eric A. Simonsen Director
Mark Steinberg Senior Vice President
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS
Each account, book or other document required to be maintained by Section
31(a) of the Investment Company Act of 1940 and Rules 31a-1 to 31a-3
thereunder are maintained by the Company at 440 Lincoln Street, Worcester,
Massachusetts.
ITEM 31. MANAGEMENT SERVICES
Effective March 31, 1995, the Company provides daily unit value
calculations and related services for the Company's separate accounts.
ITEM 32. UNDERTAKINGS
(a) Subject to the terms and conditions of Section 15(d) of the
Securities Exchange Act of 1934, the undersigned Registrant hereby
undertakes to file with the Securities and Exchange Commission such
supplementary and periodic information, documents, and reports as may
be prescribed by
<PAGE>
any rule or regulation of the Commission heretofore or hereafter
duly adopted pursuant to authority conferred in that section.
(b) The Registrant hereby undertakes to include as part of the
application to purchase a Contract a space that the applicant can
check to request a Statement of Additional Information.
(c) The Registrant hereby undertakes to deliver Statement of Additional
Information promptly upon written or oral request, according to the
requirements of Form N-4.
(d) Insofar as indemnification for liability arising under the 1933 Act
may be permitted to Directors, Officers and Controlling Persons of
Registrant under any registration statement, underwriting agreement or
otherwise, Registrant has been advised that, in the opinion of the
Securities and Exchange Commission, such indemnification is against
public policy as expressed in the 1933 Act and is, therefore,
unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by Registrant of expenses
incurred or paid by a Director, Officer or Controlling Person of
Registrant in the successful defense of any action, suit or
proceeding) is asserted by such Director, Officer or Controlling
Person in connection with the securities being registered, Registrant
will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is
against public policy as expressed in the 1933 Act and will be
governed by the final adjudication of such issue.
(e) The Company hereby represents that the aggregate fees and charges
under the Contracts are reasonable in relation to the services
rendered, expenses expected to be incurred, and risks assumed by the
Company.
ITEM 33. REPRESENTATIONS CONCERNING WITHDRAWAL RESTRICTIONS ON SECTION 403(b)
PLANS AND UNDER THE TEXAS OPTIONAL RETIREMENT PROGRAM
Registrant, a separate account of First Allmerica Financial Life Insurance
Company ("First Allmerica"), states that it is (a) relying on Rule 6c-7
under the 1940 Act with respect to withdrawal restrictions under the Texas
Optional Retirement Program ("Program") and (b) relying on the "no-action"
letter (Ref. No. IP-6-88) issued on November 28, 1988 to the American
Council of Life Insurance, in applying the withdrawal restrictions of
Internal Revenue Code Section 403(b)(11). Registrant has taken the
following steps in reliance on the letter:
1. Appropriate disclosures regarding the redemption/withdrawal
restrictions imposed by the Program and by Section 403(b)(11) have
been included in the prospectus of each registration statement used in
connection with the offer of the Company's variable contracts.
2. Appropriate disclosures regarding the redemption/withdrawal
restrictions imposed by the Program and by Section 403(b)(11) have
been included in sales literature used in connection with the offer of
the Company's variable contracts.
3. Sales Representatives who solicit participants to purchase the
variable contracts have been instructed to specifically bring the
redemption withdrawal restrictions imposed by the Program and by
Section 403(b)(11) to the attention of potential participants.
4. A signed statement acknowledging the participant's understanding of
(I) the restrictions on redemption/withdrawal imposed by the Program
and by Section 403(b)(11) and (ii) the investment alternatives
available under the employer's arrangement will be obtained from each
participant who purchases a variable annuity contract prior to or at
the time of purchase.
<PAGE>
Registrant hereby represents that it will not act to deny or limit a
transfer request except to the extent that a Service- Ruling or written
opinion of counsel, specifically addressing the fact pattern involved and
taking into account the terms of the applicable employer plan, determines
that denial or limitation is necessary for the variable annuity contracts
to meet the requirements of the Program or of Section 403(b). Any transfer
request not so denied or limited will be effected as expeditiously as
possible.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant certifies that it meets all of the
requirements for effectiveness of this Registration Statement pursuant to Rule
485(b) under the Securities Act of 1933 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereto duly
authorized, in the City of Worcester, and Commonwealth of Massachusetts on the
2nd day of February, 1998.
ALLMERICA SELECT SEPARATE ACCOUNT OF
FIRST ALLMERICA FINANCIAL LIFE INSURANCE COMPANY
By: /s/ Abigail M. Armstrong
--------------------------------
Abigail M. Armstrong
Secretary and Counsel
Pursuant to the requirements of the Securities Act of 1933, this Amendment to
the Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
Signatures Title Date
- ---------- ----- ----
/s/ John F. O'Brien Director and Chairman of February 2, 1998
- --------------------------- the Board
John F. O'Brien
/s/ Bruce C. Anderson Director
- ---------------------------
Bruce C. Anderson
/s/ Robert E. Bruce Director
- ---------------------------
Robert E. Bruce
/s/ John P. Kavanaugh Director, Vice President and
- --------------------------- Chief Investment Officer
John P. Kavanaugh
/s/ John F. Kelly Director, Vice President and
- --------------------------- General Counsel
John F. Kelly
/s/ J. Barry May Director
- ---------------------------
J. Barry May
/s/ James R. McAuliffe Director
- ---------------------------
James R. McAuliffe
/s/ Edward J. Parry III Director, Vice President and
- --------------------------- Chief Financial Officer
Edward J. Parry III
/s/ Richard M. Reilly Director, President and
- --------------------------- Chief Executive Officer
Richard M. Reilly
/s/ Eric A. Simonsen Director and Vice President
- ---------------------------
Eric A. Simonsen
/s/ Phillip E. Soule Director
- ---------------------------
Phillip E. Soule
<PAGE>
EXHIBIT TABLE
Exhibit 9 Consent and Opinion of Counsel
Exhibit 10 Consent of Independent Accountants
<PAGE>
February 2, 1998
First Allmerica Financial Life Insurance Company
440 Lincoln Street
Worcester, MA 01653
RE: ALLMERICA SELECT SEPARATE ACCOUNT OF
FIRST ALLMERICA FINANCIAL LIFE INSURANCE COMPANY
FILE #'S: 33-71058 AND 811-8116
Gentlemen:
In my capacity as Counsel of First Allmerica Financial Life Insurance Company
(the "Company"), I have participated in the preparation of the Post-Effective
Amendment to the Registration Statement for Allmerica Select Separate Account on
Form N-4 under the Securities Act of 1933 and the Investment Company Act of
1940, with respect to the Company's group and individual variable annuity
contracts.
I am of the following opinion:
1. Allmerica Select Separate Account is a separate account of the Company
validly existing pursuant to the Massachusetts Insurance Code and the
regulations issued thereunder.
2. The assets held in Allmerica Select Separate Account are not chargeable
with liabilities arising out of any other business the Company may conduct.
3. The group and individual variable annuity contracts, when issued in
accordance with the Prospectus contained in the Registration Statement and
upon compliance with applicable local law, will be legal and binding
obligations of the Company in accordance with their terms and when sold
will be legally issued, fully paid and non-assessable.
In arriving at the foregoing opinion, I have made such examination of law and
examined such records and other documents as in my judgment are necessary or
appropriate.
I hereby consent to the filing of this opinion as an exhibit to the
Post-Effective Amendment to the Registration Statement of Allmerica Select
Separate Account filed under the Securities Act of 1933.
Very truly yours,
/s/ Sylvia Kemp-Orino
Sylvia Kemp-Orino
Assistant Vice President and Counsel
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in the Statement of Additional Information
constituting part of this Post-Effective Amendment No. 10 to the Registration
Statement on Form N-4 of our report dated February 3, 1997, except as to
Notes 1 and 2, which are as of February 19, 1997, relating to the financial
statements of First Allmerica Financial Life Insurance Company, and our
report dated March 26, 1997 relating to the financial statements of Allmerica
Select Separate Account of First Allmerica Financial Life Insurance Company,
both of which appear in such Statement of Additional Information. We also
consent to the reference to us under the heading "Experts" in such Statement
of Additional Information.
/s/ Price Waterhouse LLP
Price Waterhouse LLP
Boston, Massachusetts
February 9, 1998
